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2 Demands on HRA – Percentage of BP+DA and 2 Classifications of Metros and Non-Metros

2 Demands on HRA – Percentage of BP+DA and 2 Classifications of Metros and Non-Metros
There are a large number of demands for paying HRA as a percentage of (Basic Pay + DA), instead of as a percentage of Basic Pay alone, as at present. Representations have also been received regarding enhancement of percentage rates and having only two classifications of Metros and Non-metros (instead of the present classification of X, Y and Z cities).

In view of the fact that the DA calculation methodology that is being followed does include a certain weightage for housing, the demand to pay HRA as a percentage of Basic Pay + DA is not justified.

Compensation for housing in 2013 was 1.79 times that in 2006 for Class X cities, 2.07 times for Class Y cities and 2.92 times for Class Z cities. During the same period, the weighted (by population of cities) average rise31 in housing index for Class X cities was 1.69 times, for thirty most populated Class Y cities it was 2.10 times, and for twenty-five most populated Class Z cities it was also 2.10 times. Thus, it can be safely concluded that the rise in housing compensation has largely kept pace with the rise in rental values in all categories of cities.

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