The Union Cabinet, chaired by the Prime Minister
Shri Narendra Modi, has given its approval to the proposal of the Ministry of
Finance, Department of Expenditure for reclassification/upgradation of certain
cities/towns on the basis of Census-2011, for the purpose of grant of House Rent Allowance (HRA) and
Transport Allowance to Central Government employees.
HRA
and Transport Allowance are admissible to Central Government employees
depending upon employees’ Basic Pay (including NPA where applicable)/Grade Pay
and the classification of the city/town where they are posted. The existing
classification of cities/towns in different classes viz. ‘X’, ‘Y’& ‘Z’ for
the purpose of HRA and 13 specified cities classified earlier as `A-1’/`A’ and ``Other
Places” for the purpose of Transport Allowance, is as per the criterion
recommended by the 6th Central Pay Commission. The existing
qualifying limits of population for classification for HRA purpose is 50 lakhs
and above for `X’, 5-50 lakhs for `Y’ & below 5 lakhs for `Z’ class city.
Transport Allowance is payable at `higher rates’ in 13 specified cities
classified earlier as `A-1’/`A’ (i.e. those cities having population of 20
lakhs and above) and at `lower rates’ in all Other Places.
The
classification of cities/towns for this purpose is revised on the basis of
their population as reflected in the decennial census report. The existing
classification of various cities/towns is based on 2001 Census figures. The
criterion of population for this purpose has been followed as recommended by
the Central Pay Commissions.
On
the basis of the final population figures of Census-2011, two cities have qualified
for being upgraded from `Y’ class to `X’ class and 21 cities have qualified for
being upgraded from `Z’ to `Y’ class for the purpose of HRA. Six cities have
qualified for being upgraded from ``Other Places” to specified higher class for
the purpose of Transport Allowance.
As
the Government continues to face a difficult fiscal situation and also as the 6th
Central Pay Commission had recommended payment of revised allowances only with
prospective effect, the date of effect of the revised classification of cities
on the basis of Census-2011 is proposed as 01.04.2015. The impact on the
exchequer on account of upgradation of 29 cities, would be of the order of Rs.128
crore per annum, for 2015-16.
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DSM/KA