Expected DA from January 2016 likely to change the Fitment Factor of 7th CPC

At the end of the Sixth CPC Regime all the Central Government servants are at the verge of receiving their last installment of Dearness Allowance in Sixth Pay Commission. Almost the DA from January 2016 will be finalized after the release of AICPIN for the month of December 2015. The eleven months AICPIN Points released from January 2015 to November 2015 by Labour Bureau suggests that there is a possibility to get 6 to 7 percent hike in DA from January 2016. But the AICPIN for the Month of December will determine the exact rate of hike in Dearness Allowance from Jan 2016.

The rate of DA, as expected by 7th Pay commission, if arrived at 125 % with 6% hike there will be no change in Fitment factor. Because the Fitment Factor 2.57 is arrived by adding the 125% DA, at the rate anticipated on 1.1.2016. If AICPIN for December 2015 necessitates changing the expected DA from 125% to the level of 126 % with hike of 7%, then there will be certainly an impact in the Fitment Factor of 7th CPC. In that case, there will be change in decimals of fitment factor

So, Expected DA from January 2016 will play vital role in determining Fitment Factor if it increases from expected level of 125% to 126%.

What will be the fitment factor if DA reaches at 126% from January 2016.

When it was anticipated that the DA will be 125 % from January 2016, The 7th Pay Commission stated in the Report that

“This fitment factor of 2.57 is being proposed to be applied uniformly for all employees. It includes a factor of 2.25 on account of DA neutralization, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. Accordingly, the actual raise/fitment being recommended is 14.29 percent”

If 126% of DA has to be taken into account for arriving Fitment factor with the recommended 14.29 % increase..

The Revised Fitment Factor will be as follows

The fitment factor after DA neutralization = 2.26

Increase of 14.29% over 2.26 = 0.32

Total (2.26+0.32) = 2.58

So the fitment factor for arriving revised pay will be 2.58 as in case of the DA reaches 126% from January 2016

Let us wait for the release of AICPIN for the Month of December 2016..

Source : http://govtstaffnews.in/

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No. 5/1/2015- CPI
GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU

`CLEREMONV, SHIMLA-171004
DATED : 30th October, 2015

Press Release

Consumer Price Index for Industrial Workers (CPI-IW) – September, 2015

The All-India CPI-IW for September, 2015 increased by 2 points and pegged at 266 (two hundred and sixty six). On 1-month percentage change, it increased by (+) 0.76 per cent between August and September, 2015 which was static between the same two months a year ago.

The maximum upward pressure to the change in current index came from Food group contributing (+) 1.78 percentage points to the total change. At item level, Arhar Dal, Masur Dal, Moong Dal, Urd Dal, Mustard Oil, Onion, Cauliflower, Green Coriander Leaves, Potato, Tea (Readymade), Sugar, Electricity Charges, Private Tuition Fee, Flower/Flower Garlands, etc. are responsible for the increase in index. However, this increase was restricted by Wheat, Fish Fresh, Poultry (Chicken), Eggs (Hen), Apple, Coconut, Tomato, Petrol, Washing Soap, etc., putting downward pressure on the index.

The year-on-year inflation measured by monthly CPI-IW stood at 5.14 per cent for September, 2015 as compared to 4.35 per cent for the previous month and 6.30 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 5.71 per cent against 3.55 per cent of the previous month and 6.46 per cent during the corresponding month of the previous year.

At centre level, Chhindwara reported the highest increase of 10 points followed by Varanasi (9 points), Pune, Tripura, Jalpaiguri and Bhilwara (6 points each). Among others, 5 points rise was observed in 5 centres, 4 points in 7 centres, 3 points in 8 centres, 2 points in 16 centres and 1.point in 19 centres. On the contrary, Goa recorded a maximum decrease of 4 points followed by Ernakulam 3 points. Among others, 2 points decrease was observed in 4 centres and 1 point in 2 centres. Rest of the 9 centres’ indices remained stationary.

The indices of 36 centres are above All India Index and other 42 centres’ indices are below national average.

The next issue of CPI-IW for the month of October, 2015 will be released on Monday, 30th November, 2015. The same will also be available on the office website www. labourbureau.gov. in.

(S. S. NEGI)
DEPUTY DIRECTOR GENERAL

Source : labour Bureau

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“The central cabinet has given its approval yesterday to a six percent hike in dearness allowance from July 2015 onwards, for Central Government employees and pensioners.”

Central Government employees and pensioners get two dearness allowance hikes each year. The dearness allowance for the period of months between January to June is given in March; the DA hike for July to December is given in September.

Accordingly, the second installment of Dearness Allowance, for the months of July to December, has been fixed at 6 percent. The cabinet gave its approval yesterday. The current DA of 113% will, from 01.07.2015 onwards, increase to 119%.

Following the hike, Central Government employees will get a minimum increment of Rs.420 per month. The increase is dependent on the basic pay(Band Pay + Grade Pay) of the employees. For example, let us consider an employee who has been working for 25 years, and receives a basic pay of Rs.16,000 per month. He will get a DA hike of Rs.960.

The current method of calculation of DA was prescribed by the 6th Pay Commission. The method, which has been in effect for nearly ten years now, will be used one last installment to calculate the DA of January (01.01.2016). The subsequent Dearness Allowance calculations will be made based on the method recommended by the 7th Pay Commission. The Commission is expected to submit its recommendations to the Centre by December this year. The recommended revised method of calculations for DA in the report will be follow to arrive DA from 1.1.2016.

Towards the end of this month, the Ministry of Finance will issue relevant orders to give out six percent DA payment to the Central Government employees and pensioners. Only then will the increased DA be given to the employees, along with the arrears of the past two months (July and August).

78 cities were selected from all over the country and the fluctuations in the prices of essential commodities in these cities are tracked. These fluctuations are used to calculate the monthly points (CPI-IW BY 2001 = 100), which are further used to arrive at the dearness allowance.

Source: Govtenews

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The last episode of “Expected DA from July 2015” is almost confirmed to hike by 6% and the official announcement is expected in the second week of next month.

‘The government usually announces additional dearness allowance for Central staff twice in a year from January and July, based on the price-fluctuation data of the previous six months.’

Central Government employees are currently being given a Dearness Allowance of 113%. With 6% DA almost conclusively assured from July 2015 onwards, official announcement is expected to be made during the cabinet meeting in the second week of next month. As soon as cabinet gives its nod, DA will be issued at 119% for the six months starting July 2015, up to December 2015.

Generally additional dearness allowance is being calculated only after releasing the Consumer Price Index for the previous six months. The price fluctuation data for the six months (July to December 2015) will be published by the Labour Bureau each month. Based on this AICPIN Points, a new another additional Dearness Allowance will be issued from January 2016.

The AICPIN points of December 2015, that is last month data will be announced only towards the end of January 2016. Only then will the Dearness Allowance from January 2016 will be calculated and it will be implemented after the cabinet gives its approval in March.

This will be the final dearness allowance based on the calculations prescribed by the 6th Central Pay Commission.

Just have a look the table is given below, the total Dearness Allowance given in their period of 5th and 6th Pay Commission…

Source: www.cgstaffnews.in

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