6/29/2017 Cabinetapprovesrecommendationsofthe7thCPConallowances

PressInformationBureau
GovernmentofIndia
CabinetCommitteeonEconomicAffairs(CCEA)
28June201720:24IST
Cabinetapprovesrecommendationsofthe7thCPConallowances

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved the recommendations of the 7th
CPConallowanceswithsomemodifications.Therevisedratesoftheallowancesshallcomeintoeffectfrom1stJuly,2017
andshallaffectmorethan48lakhcentralgovernmentemployees.

While approving the recommendations of the 7th CPC on 29th June, 2016, the Cabinet had decided to set up the
CommitteeonAllowances(CoA)inviewofsubstantialchangesintheexistingprovisionsandanumberofrepresentations
received.ThemodificationsarebasedonsuggestionsmadebytheCoAinitsReportsubmittedtoFinanceMinisteron27th
April,2017andtheEmpoweredCommitteeofSecretariessetuptoscreentherecommendationsof7thCPC.

7thCPCrecommendationsonAllowances

The 7th CPC had adopted a threepronged approach in examining a total of 197 allowances which involved an
assessmentoftheneedforcontinuationofeachallowance,appropriatenessofthesetofpeoplecoveredbytheallowance
andrationalisationwhichinvolvedclubbingofallowanceswithsimilarobjectives.Basedontheexaminationontheselines,
the 7th CPC recommended that 53 allowances be abolished and 37 be subsumed in an existing or a newly proposed
allowance.

For most of the allowances that were retained, the 7th CPC recommended a raise commensurate with inflation as
reflectedintheratesofDearnessAllowance(DA).Accordingly,fullyDAindexedallowancessuchasTransportAllowance
werenotgivenanyraise.AllowancesnotindexedtoDAwereraisedbyafactorof2.25andthepartiallyindexedonesbya
factorof1.5.Thequantumofallowancespaidasapercentageofpaywasrationalisedbyafactorof0.8.

A new paradigm has been evolved to administer the allowances linked to risk and hardship. The myriad allowances,
theircategoriesandsubcategoriespertainingtociviliansemployees,CAPFanddefencepersonnelhavebeenfittedintoa
tablecalledtheRiskandHardshipMatrix(R&HMatrix).TheMatrixhasninecellsdenotingvaryingdegreesofriskand
hardship with one extra cell at the top named as RH Max to include Siachen Allowance. Multiple rates applicable to
individualallowanceswillbereplacedbytwoslabratesforeverycelloftheR&HMatrix.

ModificationsapprovedbytheCabinet

ThemodificationsapprovedtodaywerefinalisedbytheECoSbasedontherecommendationsoftheCoA.TheCoA
had undertaken extensive stakeholder consultations before finalising its recommendations. It had interacted with Joint
Consultative Machinery (Staff side) and representatives from various staff associations. Most of the modifications are on
account of continuing requirement of some of the existing arrangements, administrative exigencies and to further the
rationalizationoftheallowancesstructure.

FinancialImplications

ThemodificationsapprovedbytheGovernmentintherecommendationsofthe7thCPConallowanceswillleadtoa
modestincreaseof1448.23croreperannumovertheprojectionsmadebythe7thCPC.The7thCPC,initsReport,had
projectedtheadditionalfinancialimplicationonallowancesat29,300croreperannum.Thecombinedadditionalfinancial
implicationonaccountofthe7thCPCrecommendationsalongwiththemodificationsapprovedbytheCabinetisestimated
at30748.23croreperannum.

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6/29/2017 Cabinetapprovesrecommendationsofthe7thCPConallowances

HighlightsofCabinetapprovalonAllowances

1.Numberofallowancesrecommendedtobeabolishedandsubsumed:

Governmenthasdecidednottoabolish12ofthe53allowanceswhichwererecommendedtobeabolishedbythe7th
CPC. The decision to retain these allowances has been taken keeping in view the specific functional requirements of
Railways, Posts and Scientific Departments such as Space and Atomic Energy. It has also been decided that 3 of the 37
allowances recommended to be subsumed by the 7th CPC will continue as separate identities. This has been done on
accountoftheuniquenatureoftheseallowances.Theratesoftheseallowanceshavealsobeenenhancedaspertheformula
adoptedbythe7thCPC.ThiswillbenefitoveronelakhemployeesbelongingtospecificcategoriesinRailways,Posts,
DefenceandScientificDepartments.

2.HouseRentAllowance

HRAiscurrentlypaid@30%forX(populationof50lakh&above),20%forY(5to50lakh)and10%forZ(below5
lakh)categoryofcities.7thCPChasrecommendedreductionintheexistingratesto24%forX,16%forYand8%forZ
categoryofcities.AstheHRAatthereducedratesmaynotbesufficientforemployeesfallinginlowerpaybracket,ithas
beendecidedthatHRAshallnotbelessthan5400,3600and1800forX,YandZcategoryofcitiesrespectively.This
floorratehasbeencalculated@30%,20%and10%oftheminimumpayof18000.Thiswillbenefitmorethan7.5lakh
employeesbelongingtoLevels1to3.

7thCPChadalsorecommendedthatHRArateswillberevisedupwardsintwophasesto27%,18%and9%whenDA
crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the
Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will
benefitallemployeeswhodonotresideingovernmentaccommodationandgetHRA.

3.SiachenAllowance

7thCPChadplacedSiachenAllowanceintheRHMaxcelloftheR&HMatrixwithtwoslabsof21,000and31,500.
Recognizing the extreme nature of risk and hardship faced by officers / PBORs on continuous basis in Siachen, the
Government has decided to further enhance the rates of Siachen Allowance which will now go up from the existing rate
from14,000to30,000permonthforJawans&JCOs(Level8andbelow)andfrom21,000to42,500permonthfor
Officers(Level9andabove).Withthisenhancement,SiachenAllowancewillbecomemorethantwicetheexistingrates.It
willbenefitallthesoldiersandofficersofIndianArmywhoarepostedinSiachen.

4.DressAllowance

Atpresent,varioustypesofallowancesarepaidforprovisioningandmaintenanceofuniforms/outfitssuchasWashing
Allowance, Uniform Allowance, Kit Maintenance Allowance, Outfit Allowance etc. These have been rationalised and
subsumedinnewlyproposedDressAllowancetobepaidannuallyinfourslabs@5000,10,000,15,000and20,000
perannumforvariouscategoryofemployees.ThisallowancewillcontinuetobepaidtoNursesonamonthlybasisinview
of high maintenance and hygiene requirements. Government has decided to pay higher rate of Dress Allowance to SPG
personnel keeping in view the existing rates of Uniform Allowance paid to them (which is higher than the rates
recommendedbythe7thCPC)asalsotheirspecificrequirements.Theratesforspecificclothingfordifferentcategoriesof
employeeswillbegovernedseparately.

5.ToughLocationAllowance

Some allowances based on geographical location such as Special Compensatory (Remote Locality) Allowance
(SCRLA),SunderbanAllowance&TribalAreaAllowancehavebeensubsumedinToughLocationAllowance.Theareas
underTLAhavebeenclassifiedintothreecategoriesandtherateswillbegovernedasperdifferentcellsofR&HMatrixand
will be in the range of 10005300permonth.The 7th CPC had recommended that TLA will not be admissible with

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6/29/2017 Cabinetapprovesrecommendationsofthe7thCPConallowances

SpecialDutyAllowance(SDA)payableinNorthEast,LadakhandtheIslands.Governmenthasdecidedthatemployeeswill
begiventheoptiontoavailofthebenefitofSCRLAatprerevisedratesalongwithSDAatrevisedrates.

6.Recommendationsinrespectofsomeimportantallowancespaidtoallemployees:

(i)RateofChildrenEducationAllowance(CEA)hasbeenincreasedfrom1500permonth/child(max.2)to
2250permonth/child(max.2).HostelSubsidywillalsogoupfrom4500permonthto6750permonth.

(ii) ExistingratesofSpecialAllowanceforChildCareforWomenwithDisabilitieshasbeendoubledfrom
1500permonthto3000permonth.

(iii) HigherQualificationIncentiveforCivilianshasbeenincreasedfrom200010000 (Grant) to 10000

30000(Grant).

7.RecommendationsinrespectofsomeimportantallowancespaidtoUniformedServices:Defence,CAPFs,
Police,IndianCoastGuardandSecurityAgencies

i.The7thCPChasrecommendedabolitionofRationMoneyAllowance(RMA)andfreerationtoDefence

officerspostedinpeaceareas.IthasbeendecidedthatRationMoneyAllowancewillcontinuetobepaidto
themanddirectlycreditedtotheiraccount.Itwillbenefit43000Defenceofficers.

ii.TechnicalAllowance(TierI&II)arepaidtoDefenceofficersbelongingtotechnicalbranches@3000
permonthand4500permonth.7thCPChasrecommendedthatTechnicalAllowance(TierII)bemerged
withHigherQualificationIncentiveforDefencepersonnel.InviewofthespecificrequirementsofDefence
ForcesfortheDefencepersonneltokeeppacewithchangingDefencerequirementsandtechnologies,the
Government has decided not to discontinue TechnicalAllowance. The list of courses for these allowances
willbereviewedtoremaininsyncwiththelatesttechnicaladvancementsinDefence.

iii. Thefacilityofoneadditionalfreerailwaywarrant(LeaveTravelConcession)presentlygranted to

personnelofDefenceForcesservinginfield/highaltitude/CIOpsshallalsobeextendedtoallpersonnelsof
CAPFsandtheIndianCoastGuard.

iv.RatesofHighAltitudeAllowancegrantedtoDefenceForcesandCAPFpersonnelwillbegovernedbythe
R&HMatrix.Therateswillgoupfrom81016800permonthto270025000permonth.

v.FieldAreaAllowancesaregrantedtoIndianArmy,AirForce&CAPFpersonnel.TheratesofFieldArea
Allowances(ModifiedField,Field&HighlyActive)willbegovernedbytheR&HMatrix.Therateswillgo
up from 1200 12600 per month to 6000 16900 per month. Classification of field areas for this
allowancewillbedonebyMinistryofDefenceforDefencepersonnelandbyMinistryofHomeAffairsfor
CAPFs.

vi.TheratesofCounterInsurgencyOps(CIOps)Allowance,grantedtoDefenceandCAPFswhiledeployed
incounterinsurgencyoperationswillbegovernedbytheR&HMatrix.Therateswillgoupfrom3000
11700permonthto600016900permonth.

vii.RatesofMARCOSandChariotAllowancegrantedtomarinecommandosofIndianNavywillbegoverned

bytheR&HMatrix.Therateswillgoupfrom1050015750permonthto1730025000permonth.

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6/29/2017 Cabinetapprovesrecommendationsofthe7thCPConallowances

viii.RatesofSeaGoingAllowancegrantedtopersonnelofIndianNavywillbegovernedbytheR&HMatrix.
The twelve hour conditionality for determining the eligibility of Sea Going Allowance has been
reducedtofourhours.Therateswillgoupfrom30007800permonthto600010500permonth.

ix.RatesofCommandoBattalionforResoluteAction(COBRA)AllowancegrantedtoCRPFpersonnel
deployedinNaxalhitareaswillbegovernedbytheR&HMatrix.Therateswillgoupfrom840016800
permonthto1730025000permonth.

x. RatesofFlyingAllowancegrantedtoflyingbranchandtechnicalofficersofDefenceForceswillbe
governedbytheR&HMatrix.Therateswillgoupfrom1050015750permonthto1730025000
permonth.IthasbeenextendedmutatismutandistoBSFAirWingalso.

xi.RatesofHigherQualificationIncentiveforDefencePersonnelhavebeenincreasedfrom900030000
(Grant)to1000030000(Grant).

xii.AeronauticalAllowance,presentlypaidtopersonnelofIndianNavy,hasbeenextendedtoIndianCoast
Guard.Therateofthisallowancehasbeenincreasedfrom300permonthto450permonth.

xiii.RatesofTestPilotandFlightTestEngineerAllowancewillbegovernedbytheR&HMatrix.Therates
willgoupfrom1500/3000permonthto4100/5300permonth.

xiv.RatesofTerritorialArmyAllowancehavebeenincreasedfrom175450permonthto10002000
permonth.

xv.CeilingsofDeputation(Duty)AllowanceforDefencePersonnelhavebeenincreasedfrom20004500
permonthto45009000permonth.

xvi.RatesofDetachmentAllowancehavebeenincreased165780perdayto4051170perday.

xvii.RatesofParaJumpInstructorAllowancehavebeenincreasedfrom2700/3600permonthto6000/
10500permonth.

xviii.SpecialIncident/Investigation/SecurityAllowancehasbeenrationalized.RatesforSpecialProtection
Group(SPG)havebeenrevisedto55%and27.5%ofBasicPayforoperationalandnonoperationalduties
respectively.

8.RecommendationsinrespectofsomeimportantallowancespaidtoIndianRailways

i.
RatesofAdditionalAllowancehavebeenincreasedfrom500/1000permonthto1125/2250per
month. This has also been extended to Loco Pilot Goods and Senior Passenger Guards also @750 per
month.

ii.Inviewofstrenuousnatureofthejob,newAllowancenamelySpecialTrainControllersAllowance
@5000permonthforTrainControllersofRailwayshasbeenintroduced.

9.RecommendationsinrespectofsomeimportantallowancespaidtoNurses&MinisterialStaffsofHospital

i. ExistingrateofNursingAllowancehasbeenincreasedfrom4800permonthto7200permonth.

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6/29/2017 Cabinetapprovesrecommendationsofthe7thCPConallowances

ii.RateofOperationTheatreAllowancehasbeenincreasedfrom360permonthto540permonth.

iii.RatesofHospitalPatientCareAllowance/PatientCareAllowancehavebeenincreasedfrom2070
2100permonthto41005300permonth.7thCPCrecommendationsmodifiedtotheextentthatitwill
begrantedtoMinisterialstaffalso.

10.RecommendationsinrespectofsomeimportantallowancespaidtoPensioners

RateofFixedMedicalAllowance(FMA)forPensionershasbeenincreasedfrom500permonthto1000
permonth.Thiswillbenefitmorethan5lakhcentralgovernmentpensionersnotavailingCGHSfacilities.

i. TherateofConstantAttendanceAllowancegrantedon100%disablementhasbeenincreasedfrom4500

permonthto6750permonth.

11.AllowancestoScientificDepartments

i.
Therecommendationsof7thCPCtoabolishLaunchCampaignAllowanceandSpace Technology
Allowance has not been accepted. In order to incentivize the supporting employees in Space and Atomic
Energy sector, the rate of Launch Campaign and Space Technology Allowance has been increased from
7500 per annum to 11250 per annum. Professional Update Allowance for nongazetted employees of
DepartmentofAtomicEnergywillalsocontinuetobepaidattheenhancedrateof11250perannum.

ii.The7thCPChadplacedAntarcticaAllowance,paidtotheScientistsandothermembersundertakingthe
expeditiontoAntarcticaundertheIndianAntarcticprogramme,intheRHMaxCelloftheR&HMatrix.The
rates of the RHMax Cell recommended by the 7th CPC were less than the existing rates of Antarctica
Allowancewhichiscurrentlypaidonperdaybasis.Consideringthespecificnatureoftheseexpeditionsand
to provide appropriate increase in rates, Government has decided to keep Antarctica Allowance out of the
R&HMatrixandtheallowancewillcontinuetobepaidonperdaybasisasperexistingpractice.TheRates
ofAntarcticaAllowancewillgoupfrom1125perday(Summers)and1688perday(Winters)to1500
perday(Summers)and2000perday(Winters).

12.AllowancespaidtoD/oPosts

i. Therecommendationsof7thCPCtoabolishCycleAllowance,grantedmainlytoPostmenandtrackmen

in Railways, has not been accepted. Keeping in view the specific requirement of this allowance for postmen
inDepartmentofPostsandtrackmeninRailways,thecycleallowanceisretainedandtherateshavebeen
doubledfrom90permonthto180permonth.Thiswillbenefitmorethan22,200employees.
Conclusion

Whileincreasingtherateofallowancesaffectingthecentralgovernmentemployees,especiallytheDefence,CAPFand
CoastGuardpersonnel,thestaffofRailways,Postaldepartmentandnursingstaff,thetotalnumberofallowanceshavebeen
rationalized from 197 to 128. Thus, the Government has shown a great deal of fiscal prudence and at the same time
addressedthegenuineconcernsoftheemployeesandrespondedtosomeoftheadministrativeexigenciesnecessitatingthe
modifications.
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SS/VBA/AK

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