Centre notified upgradation of 23 cities and towns on the basis of 2011 population census for providing higher house rent allowance (HRA) to central government employees.

Finance Minister Arun Jaitley

The Union Cabinet had decided on May 30, to reclassify/upgrade of 23 cities/towns on the basis of Census 2011 for the purpose of granting House Rent Allowance (HRA) to central government employees.

“…The President is pleased to decide that in supersession of all the existing orders relating to classification of cities/towns for the purpose of grant of HRA to Central Government employees, cities/towns shall now be re-classified as”X”, “Y” and “Z” for the purpose of HRA as enumerated in the Annexure to these orders……These orders shall take effect from 1st April, 2015,” the Finance Ministry’s Office Memorandum No.2/5/2014-E.II(B) dated July 21, 2015 said.

One the basis of the census, 2 cities – Pune and Ahmedabad – have been upgraded to ‘X’ class from ‘Y’ and 21 cities to ‘Y’ from ‘Z’ for the purpose of HRA.

These 21 cities are Nellore, Gurgaon, Bokaro Steel City, Gulbarga, Thrissur, Malappuram, Kannur, Kollam, Ujjain, Vasai-Virar City, Malegaon, Nanded-Waghala, Sangli, Rourkela, Ajmer, Erode, Noida, Firozabad, Jhansi, Siliguri and Durgapur.

So far, the Census 2001 has been used for deciding the house rent allowance (HRA) of central government officials posted in these towns and cities.

The existing qualifying threshold of population for HRA classification is 50 lakh and above for X, 5-50 lakh for Y and below 5 lakh for Z class cities.