House Rent Allowance (HRA)-7th Pay Commission Analysis and Recommendations

Presently, HRA is payable at the following rates:

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 Iakh and above	X	30
50-5 Iakh	Y	20
Below 5 lakh	Z	10

There are a large number of demands for paying HRA as a percentage of (Basic Pay + DA), instead of as a percentage of Basic Pay alone, as at present. Representations have also been received regarding enhancement of percentage rates and having only two classifications of Metros and Non-metros (instead of the present classification of X, Y and Z cities).

5 PBORs of uniformed forces have vehemently argued for doing away with the concept of Authorized Married Establishment and the requirement of a minimum age of 25 years for grant of Compensation in Lieu of Quarters (CILQ).

Commission recommends that HRA

should be rationalized to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively. However, the Commission also recognizes that with the current formulation, once the new pay levels are implemented, the compensation towards HRA will remain unchanged until such time as the pay and allowances are next revised. Going by the historical trend this event is likely to be a decade away. Some representations have been received stating that towards the later part of the ten year period the HRA compensation falls considerably short of the requirement. Having regard to this, the Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to30 percent, 20 percent and 10 percent when DA crosses 100 percent.

Commission recommends that HRA

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 Iakh and above	X	24
50-5 Iakh	Y	16
Below 5 lakh	Z	8

HRA when DA crosses 50%

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 Iakh and above	X	27
50-5 Iakh	Y	18
Below 5 lakh	Z	9

HRA when DA crosses 100%

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 Iakh and above	X	30
50-5 Iakh	Y	20
Below 5 lakh	Z	10

Source:  PoTools blog