House Rent Allowance (HRA) for central government employees could see a sharp increase under the 8th Pay Commission, depending on the fitment factor eventually recommended.
Under the proposed 8th Pay Commission framework, HRA for central government employees is likely to increase, subject to the fitment factor recommended by the commission.
While the commission is yet to finalise its report, employee unions have proposed higher fitment factors that would lift both basic pay and HRA.
Illustrative estimates for Level-1 employees suggest that under a 2.10 fitment factor, the revised basic pay would rise to Rs 37,800, taking HRA to Rs 11,340 in X-category cities, Rs 7,560 in Y-category cities and Rs 3,780 in Z-category cities.
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With a 2.28 fitment factor, the revised basic pay is estimated at Rs 41,040, translating into HRA of Rs 12,310, Rs 8,210 and Rs 4,100 across X, Y and Z cities, respectively.
Based on the previously adopted fitment factor of 2.57, the revised basic pay for a Level-1 employee could rise to Rs 46,260, with HRA increasing to Rs 13,880 in X cities, Rs 9,250 in Y cities and Rs 4,630 in Z cities.
The estimates are illustrative and based on current HRA rates of 30%, 20% and 10% for X, Y and Z cities.
Final pay and allowance revisions will depend on the commission's recommendations.
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The All India NPS Employees Federation (AINPSEF) has sought a higher HRA structure of 36% for X cities, 24% for Y cities and 12% for Z cities, while also recommending that HRA be revised whenever Dearness Allowance increases.
The 8th Pay Commission is expected to submit its recommendations by mid-2027, with implementation likely thereafter.
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