7th Pay Commission: Will Govt employees’ HRA hike pose threat?

New Delhi/Bhubaneswar: The implementation of the 7th Pay Commission was seen as a bonanza for the lakhs of employees but neither did it happen nor the news related to it seems to die down with the Reserve Bank of India (RBI) expressing serious concerns over the Seventh Pay Commission related hike in house rent allowances (HRA) by various state governments across the country.

In the sixth and last bi-monthly monetary policy meeting on Wednesday, the RBI said the recent hike in HRA rates by the different state governments under the 7th CPC is likely to push housing inflation further in 2018.

“CPI inflation excluding food and fuel increased further in November and December, largely on account of increase in housing inflation following the implementation of higher house rent allowances (HRA) for government employees under the 7th central pay commission (CPC) award,” RBI said in its report.

“Reflecting incomplete pass-through to domestic petroleum product prices, inflation in transport and communication remained muted in December. Inflation also slowed down in clothing and footwear, household goods and services, recreation, and education,” it further said.

This report has had an effect on RBI policy too. However, government servants do not have to worry about it as no backsteps are likely to be taken by any government, reports Financial Express.