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8th Pay Commission: Employee unions have proposed that the maximum HBA should be raised to Rs 75 lakh and the interest rate capped at 5 per cent.
8th Pay Commission Update.
8th Pay Commission: Central government employees have sought a major increase in the House Building Advance (HBA) limit ahead of the 8th Pay Commission, saying that the current ceiling must be raised, given the sharp rise in property prices across Indian cities.
Employee unions have proposed that the maximum HBA should be raised to Rs 75 lakh and the interest rate capped at 5 per cent.
The demand has been made by the Federation of National Postal Organisations (FNPO) as part of suggestions submitted to the staff side of the National Council-Joint Consultative Machinery (NC-JCM). The NC-JCM represents central government employees in discussions with the government and prepares the memorandum that will be submitted to the pay commission.
Currently, under rules framed after the 7th Pay Commission, the House Building Advance is capped at Rs 25 lakh or 34 months of basic pay, whichever is lower. The loan carries an interest rate of about 7.5 per cent.
Employee bodies argue that the existing limit no longer reflects housing costs in large urban centres. Property prices in cities such as Delhi, Mumbai, Bengaluru and Hyderabad have risen sharply in the past decade, making it difficult for government employees to buy homes using the current HBA limit.
In their proposals, employee representatives have also suggested several changes to make the scheme more useful. They have recommended allowing HBA up to 60 times the employee’s monthly salary, reducing the minimum service requirement from five years to two years, and extending the facility for purchasing old houses or undertaking major renovations.
The House Building Advance is a concessional loan provided by the government to its employees to help them construct or purchase a house. It is considered an important welfare benefit for government staff.
The 8th Pay Commission is expected to review salary structures and allowances for central government employees and pensioners. Employee unions are currently compiling their demands and suggestions before the commission formally begins its work.
Whether the proposed increase in the housing loan limit will be accepted will depend on the recommendations of the commission and the government’s final decision.
Meanwhile, the FNPO said employees continue to face procedural constraints and financial inadequacy in availing HBA under the existing rules. “In view of the revised pay structure and sharply increased cost of land, construction, and housing finance, a comprehensive revision of HBA provisions is necessary.”
“Strengthening housing facilities and substantially revising House Building Advance provisions would significantly reduce financial stress on Government employees and contribute to long-term workforce stability,” the FNPO added.
The 8th Pay Commission has begun its work and might take up to 18 months to submit its report.
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March 05, 2026, 11:32 IST
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