7th Pay Commission is recommended that all Interest free advances should be abolished.
9.1.1 Two types of advances are granted to government employees: Interest-free and Interestbearing.
9.1.2 Presently 12 interest-free advances are permissible. Their details are as follows:
Analysis and Recommendations9.1.3 There is a general demand from the JCM-Staff Side to increase all interest-free advances to three times their present value.
9.1.4 As can be seen from the table above, the amount of most of the advances is quite low. With the increased salary packages provided after successive Pay Commissions, these advances have lost their relevance. Hence, to do away with outdated provisions and thereby save on the costs involved in administering these advances, it is recommended that all Interest free advances should be abolished.
9.1.5 The following four Interest-bearing advances are presently admissible:
Table 2: Interest-bearing Advances
The present position is that meagre funds are allotted for these advances and only a few manage to avail this facility. In fact, budget provision for all of them, except Advance for purchase of Personal Computer, has been reducing over the years, as can be seen from the graph below Analysis and Recommendations
Regarding Motor Car Advance and Motor Cycle/Scooter/Moped Advance, we are of the view that quite a few schemes for purchase of vehicles are available in the market from time to time. The employees should avail of these schemes and both these advances should be abolished.
Regarding other interest-bearing advances, the following is recommended
|S.No.||Name of Advance||Recommended Ceiling||Recommendations|
|1||PC Advance||₹50,000 or actual price of PC, whichever is lower||May be allowed maximum five times in the entire service.|
|2||HBA||34 times Basic Pay OR ₹25 lakh OR anticipated price of house, whichever is least||The requirement of minimum 10 years of continuous service to avail of HBA should be reduced to 5 years.
If both spouses are government servants, HBA should be admissible to both separately.
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Existing employees who have already taken Home Loans from banks and other financial institutions should be allowed to migrate to this scheme.