Expected DA on Jan 2016 – AICPIN for December 2015

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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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Expected DA from January 2016 – 2 Point increase in December 2015 may change 7th Pay Commission fitment formula

Expected DA from January 2016 – Two Point increase in CPI for Dec 2015 could take it to 126% which is 1% more than what was reckoned for 7th Pay Commission revised Pay fixation.

If DA from January 2016 touches 126%, 7th Pay Commission fitment formula and Multiplication factor of 2.57 may require upward revision

Consumer Price Index (Industrial Workers) for the month of November 2015 has been released recently by Govt. We have one point increase in CPI for November 2015 which has moved from 269 to 270.

Consumer Price Index from January 2015 to November 2015

DA from January 2016 – Estimation for 125%:

Based on actual CPI-IW for 11 months from January 2015 to November 2015 which span from 254 to 270 and estimated index for the month of December 2015, it is almost certain that Dearness Allowance from January 2016 payable to Central Government Employees including Railway Employees and Defence Personnel will not be less than 125% (6% increase).

Even a 12 point fall in CPI-IW from 270 to 258 in December 2015 will not affect the DA from January 2016 clocking 125%.

DA from January 2016 – Estimation for 126%:

Our Proposition discussed in the earlier article on the chances for DA from January 2015 reaching 126% (7% increase) still holds good as two point increase in the CPI-IW in December 2015 would take DA from January 2016 to 126%.

DA from January 2016 – Estimation for 127%:

At the same time possibility of DA from January 2016 reaching 127% or more is remote as CPI-IW has to reach 286 in December 2015 from the present level of 270 for getting DA of 127%.

So, DA from January 2016 will be either 125% (6% increase) or 126% (7% increase). One might think that 1% additional DA from January 2016 is negligible. However, it will be 1% more than what was reckoned for 7th Pay Commission revised Pay fixation.

7th Pay Commission has estimated DA from January 2016 as 125% for the purpose of Revision of Pay and Allowances

Now, if Consumer Price Index (Industrial workers) for the month of December 2015 reaches 172 from the present level of 170, it is certain that DA from January 2016 will be 126%. In that case, 7th Pay Commission pay fitment formula and allowances which are DA indexed will have to be revised accordingly.

For instance, 7th Pay Commission’s uniform multiplication factor of 2.57 includes a factor of 2.25 on account of DA neutralisation, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. If DA from January 2016 reaches 126% then this multiplication factor will have to revised as 2.58.

Source: gconnect

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AICPIN for November 2015 – Expected DA from Jan 2016

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CPI-IW for Oct 2015 released – DA from January 2016 may touch 126%

Consumer Price Index (IW) for October 2015 released – DA from January 2016 for Central Government Employees and Pensioners is likely to increase by 6% or 7%

Labour Bureau, Ministry of Labour and Employment has released All India Consumer Price Index for Industrial Workers for the month of October 2015. CPI-IW has increased by 3 points from 266 to 269, the highest increase witnessed this year.

The increase in CPI-IW will be reflected in Dearness Allowance from January 2016 in respect of Central Government Employees including Railway Employees and Defence Personnel.

It was estimated last month that DA from January 2016 for Central Government Employees will be 125%.

However, due to sharp increase in CPI-IW for October 2015, this estimation requires a small correction now.

CPI-IW from January 2015 to October 2015

If CPI-IW for the month of November 2015 reaches 271 and remains at the same level in December 2015, then DA from January 2016 will be 126%, which is an increase of 7% from the present level. However, increase in DA more than 7% is unlikely as it requires at lease 5 point increase of CPI-IW in each of the coming two months.

At the same time, if CPI-IW increases by only one point in each of coming two months, DA from January 2016 will be 125%

Press Release of Labour Bureau for the release of CPI-IW for October 2015

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

The All-India CPI-IW for October, 2015 increased by 3 points and pegged at 269 (two hundred and sixty nine). On 1-month percentage change, it increased by (+) 1.13 per cent between September and October, 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 (+) 2.15 percentage points to the total change. At item level, Rice, Wheat & Wheat Atta, Arhar Dal, Gram Dal, Masur Dal, Moong Dal, Urd Dal, Mustard Oil, Milk, Chillies-Dry, Potato, Tomato, Green Vegetables, Tea (Readymade), Sugar, Cooking Gas, Electricity Charges, Private Tuition Fee, etc. are responsible for the increase in index. However, this increase was restricted by Coconut oil, Fish Fresh, Poultry (Chicken), Onion, Apple, Soft Coke, etc., putting downward pressure on the index.

The year-on-year inflation measured by monthly CPI-IW stood at 6.32 per cent for October, 2015 as compared to 5.14 per cent for the previous month and 4.98 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 7.50 per cent against 5.71 per cent of the previous month and 4.48 per cent during the corresponding month of the previous year.

At centre level, Jabalpur reported the highest increase of 10 points followed by Tripura and Ludhiana (9 points each), Ghaziabad, Kodarma and Vadodra (7points each), and Sholapur and Guntur (6 points each). Among others, 5 points rise was observed in 9 centres, 4 points in another 9 centres, 3 points in 10 centres, 2 points in 13 centres and 1 point in 12 centres. On the contrary, Giridih and Chhindwara recorded a maximum decrease of 4 points each followed by Ranchi-Hatia and Haldia (3 points each). Among others, 1 point decrease was observed in 4 centres. Rest of the 9 centres’ indices remained stationary.

The indices of 35 centres are above All India Index and other 42 centres’ indices are below national average. The index of Angul-Talcher centre remained at par with all-India index.

The next issue of CPI-IW for the month of November, 2015 will be released on Thursday, 31st December, 2015. The same will also be available on the office website www.labourbureau.gov. in.

Assumption 2: (Assumption of CPI for getting maximum possible DA from January 2016):

DA from January 2016 is calculated to be 126%, only if CPI touches 272 from the present level of 266, at least two times in the coming three months with at least one point increase in the remaining month.  We feel that this scenario is remotely possible considering the trend of CPI, which shows only moderate inflation.

Source: :Labour Bureau via: gconnect

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

CLEREMONT, 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

Authority: http://labourbureau.nic.in/

Click to view the Press Release in Hindi & English

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All India Consumer Price Index for the month of August 2015 release by the Labour Bureau today…

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

CLEREMONT, SHIMLA-171004
DATED : 30th September, 2015

Press Release

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

The All-India CPI-IW for August, 2015 increased by 1 point and pegged at 264 (two hundred and sixty four). On 1-month percentage change, it increased by (+) 0.38 per cent between July, 2015 and August, 2015 when compared with the increase of (+) 0.40 per cent between the same two months a year ago.

The maximum upward pressure to the change in current index came from Food group contributing (+) 1.57 percentage points to the total change. At item level, Arhar Dal, Masur Dal, Groundnut Oil, Mustard Oil, Beef, Milk, Onion, Garlic, Brinjal, Parval, Peas, Coconut, Tea (Readymade), Electricity Charges, Barber Charges, etc. are responsible for the increase in index. However, this increase was restricted by Rice, Wheat, Wheat Atta, Fish Fresh, Poultry (Chicken), French Beans, Potato, Tomato, Cooking Gas, Petrol, etc., putting downward pressure on the index.

The year-on-year inflation measured by monthly CPI-IW stood at 4.35 per cent for August, 2015 as compared to 4.37 per cent for the previous month and 6.75 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 3.55 per cent against 3.21 per cent of the previous month and 7.63 per cent during the corresponding month of the previous year.

At centre level, Jharia reported the highest increase of 9 points followed by Ludhiana (7 points), Kodarma and Labac Silchar (6 points each). Among others, 5 points in 6 centres, 4 points in 11 centres, 3 points in 7 centres, 2 points in 17 centres and 1 point in 15 centres. On the contrary, Goa centre recorded a maximum decrease of 4 points followed by Mundakayam and Ernakulam 3 points each. Among others, 2 points decrease was observed in Quilon centre and 1 point in 4 centres. Rest of the 10 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 index of CPI-IW for the month of September, 2015 will be released on Friday, 30th October, 2015. The same will also be available on the office website www.labourbureau.gov.in.

sd/-
(I.S.NEGI)
DEPUTY DIRECTOR GENERAL

Authoirty: Labour Bureau

Click to view the press release in Hindi

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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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