House Rent Allowance for Central Government Employees

“HRA is a compensation for expenses in connection with the rent of the residential accommodation to be hired/leased by the employee and is graded based on the level of the employee”

HRA paid from 2008 @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities as per 6th CPC Recommendations. Now, 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities.
The rates of HRA will not be less than Rs.5400/-, 3600/- & 1800/- at X, Y & Z class cities respectively.

The rates of HRA will be revised to 27%, 18% and 9% for X, Y & Z class cities respectively when Dearness Allowance (DA) corsses 25 percent and further revised to 30%, 20% and 10% when DA corsses 50%.

Special orders on continuance of HRA at Delhi ‘X’ class city) rates to Central Government employees posted at Faridabad, Ghaziabad, Noida and Gurgaon, at Jalandhar (‘Y’ class city) rates to Jalandhar Cantt. at “Y” class city rates to Shillong, Goa & Port Blair and HRA at par with Chandigarh (‘Y’ class city) to Panchkula, S.A.S. Nagar(Mohali)

The allowances relating to CILQ. FAA and SNLQ henceforth stand abolished as a separate allowance. Eligible employees to be governed by the newly proposed provisions for Housing for Personnel Below Officers Rank (PBORs)

NPA & MSP: Add-ons like NPA, MSP, etc. should not be included while working out HRA [Para 8.7.16 of 7th CPC Report

HRA Calculation with minimum pay of all levels in Pay Matrix.

Classification of Cities and Towns as per the percentage for the purpose of determining HRA

Today’s Discussion – Click to Read Hot Questions & Answers

Expected DA from July 2019: DA 4% Confirm…5% Possible! – Click for more details
A*=STATES/UT, B*=CITIES CLASSIFIED AS “X”, C*=CITIES CLASSIFIED AS “Y”

NC JCM STAFF SIDE SUGGESTION ON HOUSE RENT ALLOWANCE

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Admissibility of House Rent Allowance (HRA) in the event of non-acceptance or surrender of railway residential accommodation

GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
RAILWAY BOARD

No.E(P&A)II/2012/F.E.2/4

The General Manager,
All Indian Railways/PUs, NF(Con), CORE
The DG/RDSO/Lucknow, DG/NAIR/Vadodara
CA0s,DMW/Patia1a, WPO/Patna, COFMOW/NDLS, RWP/Bela, CAO/IROAF

Dated: 02.04.2019

Sub: Admissibility of House Rent Allowance (HRA) in the event of non-acceptance or surrender of railway residential accommodation.

Ref:
(1) Department of Expenditures, MoFs 0M No.2/5/2017-E.IIB dated 05.03.2019
(2) Rai1way Board’s letter No.E(P&A)II-87/HRA-15, dated 16.5.1988
(3) Rai1way Board’s No.E(P&A)II-95/HRA-3, dated 14.02.1996
(4) Rai1way Board’s letter No.E(P&A)II-99/HRA-2, dated 12.07.1999 & 16.03.2000
(5) Rai1way Board’s letter No.E(P&A)II-2002/HRA-4, dated 16.10.2002 & 09.05.2003
(6) Rai1way Board’s No.E(P&A)II-2010/HRA-2, dated 08.12.2010
(7) Rai1way Board’s letter No.E(P&A)II-2017/HRA-3, dated 15.01.2018

With reference to Department of Expenditure, Ministry of Finance’s Office Memorandum at (I) & other Railway Board’s references above, Board (MS, FC & CRB) have approved the following:

1. For other than those Railway employees (officers and staff) for whom accommodation is specially earmarked and whose occupation of railway quarter is essential for easy accessibility during emergencies, efficient discharge of their duties, et., the condition of Applying for Government Accommodation and furnishing of ‘No Accommodation Certificate’ by Employees to become eligible for HRA may be dispensed with and Department of Expenditure. MoF’s letter under reference may be made applicable Mutatis Mutandis is for such categories of Railway employees.

2. Railway accommodation so vacated may be allotted to other employees of the same pool or other pool or Essential category employees by changing the pool, if required, by the Zonal Railway. The Quarter-allotment Authority shall promptly take necessary action in this regard.

3. Other extant instructions/guidelines issued from Board on the subject shall remain unchanged as modified from time to time.

Department of Expenditure, MoF’s letter under ref. (1) is enclosed for ready reference.

This issues with the concurrence of Associate Finance of Transformation Cell Of Railway
Board.

Kindly acknowledge the receipt and ensure compliance.

sd/-
(Umesh Balonda)
Executive Director/S&T)
Transformation Cell

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No Hike in 7th CPC HRA and Fitment Factor – Minister Replied in Parliament on 11.12.2018

No increase in 7th Pay Commission Fitment Factor (2.57) and HRA (24%, 16% & 8%)

Finance Minister replied in Parliament on 11th December 2018 regarding the mater as follows…

Increase in Pay Fitment Factor and HRA

“The fitment factor for the purpose of fixation of pay in the revised pay structure based on the recommendations of the 7th Central Pay Commission is 2.57 which is uniformly applicable to all categories of employees. As the same is based on the specific and considered recommendations of the 7th Central Pay Commission, no change therein is envisaged.

The Government vide Resolution dated 6th July, 2017 decided that HRA shall be revised to 27%, 18% and 9% of Basic Pay in X, Y and Z cities when Dearness Allowance (DA) crosses 25% and further to 30%, 20% and 10% of Basic Pay in X,Y and Z cities when DA crosses 50%.”

HRA Enhanced Pay Scale with Profit Details for 3 Levels

BPMS Demanded to Fix the as follows…
HRA should be paid @ 35, 25 and 15% of pay – BPMS

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House Rent Allowance (HRA) (Para 8.7.3-16)
Existing Provisions: HRA is paid @30, 20 and 10 percent for X class (50 Lakh & above), Y class (5 to 50 lakh) and Z class (below 5 lakh) cities respectively.

At present, in the case of those drawing either NPA or MSP or both, HRA is being paid as a percentage of BP+NPA or BP+MSP or BP+NPA+MSP respectively.

Recommendations of 7th CPC: It has been retained and rationalized. After applying a multiplication factor of 0.8, the rates have been revised downwards to 24 percent, 16 percent and 8 percent of the Basic Pay for X, Y and Z class cities, respectively.

The rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent. Add-ons like NPA, MSP, etc. should not be included while working out HRA.

Demands:
I. National Council (Staff Side), JCM: HRA may be retained @30%, 20% and 10% for X, Y and Z cities respectively as the Commission has taken unreliable statistics to determine HRA, which has been reduced by a multiplication factor of 0.8 to 24%, 16% and 8% for X, Y and Z cities respectively.

II. CAG, Civil Aviation, M/o Health & FW, M/o HRD – D/o of Higher Education, MEA, Coal, DAE, DRDO, Dep. Of Space, CVC: Retain the allowance at the existing rates.

III. M/o of Law & Justice- D/o Justice: Cities having population of more than 1 crore may be granted HRA @ 30%.

Analysis and Recommendations of the Committee: The Committee has the following observations on the recommendations of the 7th CPC on HRA:
(I) HRA rates have been revised downwards by applying the multiplication factor of 0.8 applied by the 7th CPC on all percentage- based allowances. This was done to neutralise the significant increase in the Basic Pay. All fixed allowances have only been given an inflation indexed increase by the 7th CPC. While the 7th CPC has not explicitly stated how the multiplication factor of 0.8 has been arrived at anywhere in the Report, it may be seen that factoring in the expected Dearness Allowance of 125% on 01.01. 2016 would have yielded a multiplication factor of 0.875 which may have been rounded off to 0.8.
(II) On the 7th CPC recommendation that the rate of HRA will be revised to 27%, 18% and 9% when DA crosses 50 percent and further revised to 30%, 20% & 10% when DA crosses 100%, the Committee is of the view that given the inflation rates since January 2016 and the RBI policy on inflation, the DA rates might not go beyond 50% in the next 10 years.
(III) While the rents for residential accommodation have not gone up significantly in the recent past and might also have fallen in some areas, the HRA at the rates recommended by the 7th CPC at the lower levels might not continue to be adequate as per the prevailing market rent.

In view of these observations, the Committee has deliberated upon the following three options which separately, or in combination, can be suggested by way of modifications to the 7th CPC recommendations:

Option (i): Having regard to submissions made before it stating that towards the later part of the ten year period, HRA compensation falls considerably short of requirement, the 7th CPC has recommended that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent. However, considering the present inflation rate, the rate of increase of the Dearness Allowance and future inflation projections, it appears unlikely that DA rates will reach 100 % in the ten year period. Taking this into consideration, the Committee considered that the timing of the upward revisions in HRA rates proposed by the 7th CPC may be advanced as under:

This would have no immediate financial implication and the 1st revision, as per the current trend of increase in DA, is expected to occur in July, 2018. Accordingly, additional annual financial implication in July, 2018 will be approximately ₹1850 crore. The additional financial implication in the second, third and fourth revision will also be
approximately ₹1850 crore per annum.

Option (ii): Instead of advancing the full restoration of HRA rates, the Committee considered splitting the revisions proposed by 7th CPC as under:

The financial implication would be similar as in Option (i) except that the timing of the revision would undergo a change.

Option (iii): It has been pointed out that at the recommended rates, HRA at the minimum level might not be sufficient. The minimum HRA calculated at the entry level of Level 1for X, Y and Z category cities at the rates recommended by the 7th CPC will be ₹4320, ₹2880 and ₹1440 respectively. The Committee considered recommending that the HRA at the rates recommended by the 7th CPC may be subject to a floor which may be fixed at ₹5400, ₹3600 and ₹1800 per month, calculated at 30%, 20% and 10% of the minimum pay for X, Y and Z category cities respectively. This will benefit employees in Levels 1, 2 and 3.

The additional financial implication is estimated to be ₹ 385.00 crore and around 7.70 lakh employees shall be benefited. After a detailed consideration of the above options, the Committee recommended that either only option (iii) or option (iii) in combination with option (ii) be accepted. A final decision in this regard may be taken by E-CoS.

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RECLASSIFICATION OF CITIES/TOWNS

The present prevailing different grades shall be retained and some cities/towns shall be upgraded and reclassified for the eligibility of House Rent Allowance in different grades as detailed below:

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