CLARIFICATION ON CLASSIFICATON OF CITIES FOR HRA

Some one has asked me to further clarify the classification of cities for the purpose of HRA. Hence, it is to clarify that classification of cities/towns is always done on the basis of population as per the census. Prior to the Sixth Pay Commission Report, the said classification as well as the respective rate of HRA payable with reference to Basic Pay plus Stagnation Increment plus NPA,if any, was (i) 'A - 1' (3O%),(ii) 'A', 'B-1' & 'B-2' (15%), (iii) 'C' (7.5%) and (iv) Unclassified (5%). Based on the recommendations of the Sixth Pay Commission this classification has since been revised viz A-1 to 'X'(30%), A, B-1 & B-2 to 'Y'(20%) and C & Unclassified to 'Z' (10%). Under the said revision, rates of HRA have been enhanced in respect of all the cities, except Brihan Mumbai,Chenai, Delhi and Kolkata.

According to above revision ,HRA rate i/r/o . Ahmedabad Asset is 20% (applicable to 'Y' category) and on adding the element of 15% Project Allowance, the total rate of HRA comes to 35% whereas a Delhi it is to be paid exactly @ 2O%., as Delhi does not come under any Project.

The concept of Project Allowance is universal. It is granted to compensate the employees for lack of amenities such as schools, markets, housing and dispensaries at the places of construction of major projects. Actually, on merger of Project Allowance with HRA, the employees of ONGC have become loosers. Had the Project Allowance been kept separate and independent, substantial upward increase in its rate might have taken place from time to time as is the case in other departments.The Project Allowance was being paid at varied %age for various Projects.

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