In a piece of good news for lakhs of Central government employees, their pay is set to increase from September. After the hike in dearness allowance of Central government employees last month, the Modi-led government at the Centre had also decided to increase the House Rent Allowance of Central government employees. It means that the Central government employees will receive increased HRA from September 2021 and accordingly their salaries will increase.

It is to be remarked that as per the rule when the DA rises to 25 percent, the HRA also increases and this is the reason why the HRA of Central government employees has been increased to 27%. An order was issued by the Department of Expenditure on July 7, 2017, in which it was mentioned that when the dearness allowance will exceed 25%, the HRA will be revised automatically. 

As reported by media, earlier it was announced by the Centre that the HRA will be granted to Central government employees according to the categories of the cities such as X, Y and Z. The HRA for employees living in X category cities will be 27% of basic pay, similarly, HRA for Y category cities will be 18% of basic pay and for Z category cities, the HRA will be 9% of basic pay. As per the guidelines, if a city's population crosses 5 lakhs then it gets upgraded from Z category to Y category. The cities with a population of over 50 lakhs fall in the X category. 

As per the 7th Pay Commission Pay Matrix, the minimum basic salary of central government employees is Rs 18,000. The Central government employees who were having the basic salary of Rs 18,000 were getting DA of Rs 3060 till June 2021 at the rate of 17%. From July 2021 onwards, they will now get Rs 5040 per month according to 28% DA. 

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