Expected DA : Cabinet Committee may approve in this week

Govt to hike DA by 10%; benefit 80 lakh employees and pensioners

New Delhi: Ahead of festival season, Central Government will this month announce a hike in dearness allowance to 90 percent from existing 80 percent, benefiting about 50 lakh central employees and 30 lakh pensioners.

According to official source, dearness allowance hike will be 10 percent and would be effective from July 1, this year.

The sources further said the exact amount of dearness allowance, as a proportion of basic pay, works out to over 90 percent after factoring in the revised all India Consumer Price Index for Industrial Workers (CPI-IW) for June.

According to revised data released on August 30, retail inflation for factory workers for June stood at 11.63 percent, higher than provisional estimate of 11.06 percent for the month released on July 31.

Sources said that since the revised estimate for the month of June is available, the Finance Ministry would soon prepare a proposal for the purpose for seeking Union Cabinet nod.

They further said the proposal will be moved this month.

There would be a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10 percent to be given with effect from July 1, 2010.

DA was hiked to 80 percent from 72 percent in April, 2013, effective from January 1, this year.

As per the practice, the government uses CPI-IW data for past 12 month or a year to arrive at a number for the purpose of any DA hike. Thus, the retail inflation for industrial workers between July, 2012 to June 2013 will be used to take a final decision.

Source : PTI News

Expected DA (Dearness Allowance) from July 2013 to CENTRAL GOVERNMENT EMPLOYEES

Expected DA (Dearness Allowance) from July 2013 to CENTRAL GOVERNMENT EMPLOYEES

Since the implementation of 6CPC from 1-1-2006, the consumer price index number for industrial worker is not coming down ever but it is increasing month by month. Similarly the rate of dearness allowance paid to central government employees also increasing at the interval of every six months period. The rate of dearness allowance was at zero level on 01-01-2006. After six years from implementation of 6CPC, now the dearness allowance stands at 80% level. The average increase in the dearness allowance is at the rate of 13% per year. Actually there is nothing to rejoice over the increase of dearness allowance. The Dearness allowance is nothing but the reflection of consumer price index.
Likewise the consumer price index is determined by increase in the prices of basket of identified essential commodities. The increase of CPI number is not good any way for either the government employees or common people. Whatever the money the central government employees are supposed to get from the dearness allowance hike will be swallowed by the essential commodities for which they have to spend every month, since the prices of all the essential commodities are increasing at the alarming rate.

Now everyone eyes at the expected dearness allowance from July 2013. It is now 80 percent of AICPI Numbers from which the rate of DA has to be arrived has been released. The AICIN for Industrial Workers for two more months are yet to be released to confirm the exact rate of Dearness Allowance going to be approved by the central government. The average of AICPIN for IW from the month of July 2012 to June 2013 will determine the rate of dearness allowance to be paid from July 2013. So look at the Consumer price Index numbers from June 2012 given below:

Month	Jul 2012	Aug 2012	Sep 2012	Oct 2012	Nov 2012	Dec 2012	Jan 2013	Feb 2013	Mar 2013	Apr 2013	May 2013	Jun 2013
AICPIN	212	214	215	217	218	219	221	223	224	226	-	-

The formula for calculating dearness allowance is:

( Avg of AICPI for the past 12 months – 115.76)*100/115.76

To find out the average CPI for 12 months we need remaining two months CPI numbers. Let us assume that if the remaining two months AICPI numbers stands at 226 levels, the average AICPI for 12 months is 220.0833.

If we apply this in the formula given above the answer is = 90.120

From this it is now very much clear that, even though if there is no change in the position of AICPI numbers for remaining two months, if it happened to continue in the same level of 226 points for remaining two months, the increase in the rate of dearness allowance will be 10% for the next six months starts from July 2013. According to this, the expected dearness allowance from July 2013 for central government employees will not be less than 90% level. So it is expected that the dearness allowance will be increased from existing 80% to 90% level from July 2013. With this 10% increase in dearness allowance, the annual increment for the year 2013 also will be granted for all the central government employees from July 2013.

Source : www.gservants.com

[http://www.gservants.com/2013/06/02/expected-da-dearness-allowance-from-july-2013-to-central-government-employees/]