New Delhi: The Union Cabinet is likely to decide on the hike in HRA and other allowances under the 7th Pay Commission on Wednesday, ending the long wait of nearly 1 crore central government employees and pensioners. The 7th Pay Commission had recommended the House Rent Allowance (HRA) to be fixed at 24%, 16% and 8% depending on the city of work. Employees, however, had demanded 30%, 24% and 16% HRA.

The Ashok Lavasa-led committee, constituted to arrive at a consensus, had on April 28 suggested changes in some allowances applicable to central government employees and also for those in specific categories, including Railways and Defence.

It had recommended that 52 out of 196 allowances be abolished altogether and 36 be merged with other heads. The Union Cabinet had in April cleared important proposals relating to modifications in the 7th Pay Commission recommendations on pay and pension benefits.

Finance Secretary Lavasa had earlier said that he had taken into account representations made by all stakeholders. The Cabinet had already approved the recommendations regarding pay and pension for central government employees in August last year. The annual pension bill of the central government is likely to be around Rs 1.7 lakh crores.