The Seventh Pay Commission may hike the HRA - the House Rent Allowance admissible to the central government staff. The move is aimed to encourage property owners to rent out their properties and to reduce the shortage of rented out houses.
The pay commission may recommend for four categories instead of the existing three. The employees under the current category 'X' cities may be eligible for HRA at the rate of 40% of the basic pay from the current 30%. The employees from the cities of Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune fall in this category.
The employees under the current category 'Y' cities is likely to receive HRA @ 30 percent of basic salary, instead of the existing 20 percent.
A new category will be created covering the district towns, employees under which may receive 20% of their basic salary as House Rent Allowance.
In other regions, the HRA will be 10 percent of basic