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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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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