7th CPC Report on Allowances – Para 8.2.5 (4)
4. For most of the allowances that have been retained, we have sought to provide a raise that is commensurate with the rise in DA. Accordingly, allowances that are in the nature of a fixed amount but not DA indexed have generally been raised by a factor of 2.25.
Allowances that are in the nature of a fixed amount but are partially indexed to DA have generally been raised by a factor of 1.5. Allowances that are in the nature of a fixed amount but fully indexed to DA have not been given any raise. Regarding percentage based allowances, having regard to the increase in the pay structure (and consequently the Basic Pay) as a result of the recommendations of this Commission, and keeping in mind the raise granted to slab-based allowances, the quantum of percentage based allowances has been rationalized by a factor of 0.8.
17.23 Allowances: The entire structure of allowances have been examined de novo with the overall aim of transparency, simplification and rationalization, keeping amongst other things, the proposed pay structure in mind. The Commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Particular emphasis has been placed on simplifying the process of claiming allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix. (para 8.2.5) .
17.30 Any allowance, not mentioned here (and hence not reported to the Commission), shall cease to exist immediately. In case there is any demand or requirement for continuation of an existing allowance which has not been deliberated upon or covered in this report, it should be re-notified by the ministry concerned after obtaining due approval of Ministry of Finance and should be put in the public domain. (para 8.2.5)
Authority: 7th CPC Report