Friday, November 16, 2012

AICPI-IW for Sep-12 released – Likely increase in DA from Jan 2013 is 8%

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AICPI-IW for Sep-12 released – Likely increase in DA from Jan 2013 is 8%

Central Government Staffs, Pensioners and family Pensioners may get Dearness Allowance of 80% with effect from 1st January 2013
The price index which is called as AICPI – IW (All India Consumer price Index for industrial workers with the base as 2001=100) for the month of September 2012 has been issued by Government.
This is the table All India consumer price index AICPI-IW for the period from January 2012 to September 2012

MonthAICPI-IW
Jan 2012198
Feb 2012199
Mar 2012201
Apr 2012205
May 2012206
Jun 2012208
Jul 2012212
Aug 2012214
Sep 2012215
Oct 2012Will be released in the last week of November 2012
Nov 2012Will be released in the last week of December 2012
Dec 2012Will be released in the last week of January 2012
T
he above indices from Jan 2012 to Sept 2012, require special mention here as Calculation of expected Dearness Allowance for central government employees, Central Government Pensioners and central government family pensioners with effect from 1st January 2013 need these indices.

The expected Dearness Allowance with effect from January 2013

To calculate Dearness Allowance with effect from January 2013 we require AICPI (IW) for previous 12 months.

Dearness Allowance with effect from 1st January every year(Average of AICPI-IW for the months from January to December of previous year – 115.76)X100/115.76
Dearness Allowance with effect from 1st July every year(Average of AICPI-IW for the months from July of previous year to June of this year – 115.76)X100/115.76
115.76 is a factor which converts 1982 series AICPI (IW) (Base 1982=100), which was applicable prior to 6CPC to 2001 series AICPIW (Base 2001=100). In turn, This is arrived at by dividing the 1982 series AICPI by a linking factor which is 4.63 (536/4.63=115.76)

To estimate the Dearness Allowance that Central Government Staffs and Pensioners will be getting with effect from 1st January 2013 based on AICPI-IW, we will consider following 4 Scenario

Scenario 1 (No Inflation)Scenario 2 ( Inflation contained)Scenario 3(Same inflationary trend)Scenario 4 (More inflation)
MonthAICPI-IWAICPI-IWAICPI-IWAICPI-IW
Jan 2012198198198198
Feb 2012199199199199
Mar 2012201201201201
Apr 2012205205205205
May 2012206206206206
Jun 2012208208208208
Jul 2012212212212212
Aug 2012214214214214
Sep 2012215215215215
Oct 2012 (expected)215210216217
Nov 2012 (expected)215210217219
Dec 2012 (expected)215210218221
Expected DA80%79%80%81%
Scenario 1:
If we assume that there is no inflation from October 2012 and the AICPI-IW remains at 215 for the months of October, November and December 2012, the expected DA for the Central Government Employees and pensioners will be 80%, which is 8% more than the present 72%
Scenario 2:
If we assume that the inflation will be contained in the coming months and consequently AICPI-IW will be 210 for months from October 2012 to December 2012. Then based on following indices from January 2012 to December 2012 we get estimated DA of 79% with effect from January 2013, which is 7% more than the present 72%
Scenario 3:
If we assume that the nominal inflationary trend to continue in the coming months and consequently AICPI – IW increases 1 point each for the months from October 2012 to December 2012. Then expected DA will be 80% with effect from 1st January 2013, which is 8% more than the present 72%
Scenario 4:
If assume that inflation is more in the coming months and consequently AICPI-IW for the months from October 2012 to December 2012 increased two points each. Then expected DA will be 81% with effect from 1st January 2013, which is 9% more than the present 72%.
we may get DA of 80% with effect from 1st January 2012 if we have same inflationary trend continues or even if we have no further inflation in the coming months:
Based on the pattern we assume the chances for likely happening of scenario 1 and 3 are more. So, we may get DA of 80% with effect from 1st January 2012. The possibility of happening of scenario 4 is very less but we can not overrule the same in this inflationary trend. In that case we may get an additional DA of 9% with effect from 1st January 2013.
Click to see the full article, www.gconnect.in
[http://www.gconnect.in/ask-gc/aicpi-iw-for-sep-12-released-likely-increase-in-da-from-jan-2013-is-8.html]

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