Central Government Employees DA with effect from January 2015 is 113%. On the basis of AICPI (IW), DA from July 2015 is now confirmed to be 119%. DA from July 2015 will be announced by Govt in the month of September 2015 or October 2015 normally.

Eligible DA from July 2015 is 119% – All India Consumer Price Index for June 2015 released by Labour Bureau – 3 Point increase in AICPI (IW) from 258 to 261.

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Calculation of DA(Dearness Allowance) Rates

•     DA rates for Government employees are to be announced half yearly which will be applicable from first January and First July.
•     On implementation of Sixth Pay Commission recommendations with effect from 01.01.2006 a new method of calculation of DA (dearness allowance) rates is adopted by Central (including Railways)and State Governments.
•     DA rates are fixed on the basis of All India Consumer Price Index (AICPI) for industrial workers with Base year as 2001.

Method of Calculation
DA is calculated using the following formulae:

Dearness Allowance = (Avg of AICPI for the past 12 months – 115.76)*100/115.76
(Fractions are ignored)

The figure 115.76 signifies the average of price index from Jan 2005 to Dec 2005.

Example: To calculate Jan 2013 DA rate Price index average from Jan 2012 to Dec 2012 is taken.

AICPI data for Jan 2012 to Dec 2012 as per Labour Bureau, Department Statistics, Government of India website is as follows:

Dearness allowance (01.01.2013)=( 209.33-115.76)*100/115.76=80.83

• DA  (after ignoring fraction)=80 %
• So Rate of DA expected from 01.01.2013 is 80 %
• The rate of increase will be 8% (72% to 80%).

Source: Indian railway employee

The post Method of Calculation of Dearness Allowance and Expected DA Increase from 2013 appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

The Dearness allowance is based on All India Consumer Price Index. The Dearness allowance is granted to compensate the price increase above 536 points (Base Year 1982=100) [115.763 Points (Base Year 2001=100)], to which the revised pay scales relate. This will be approved twice a year, payable from 1st January and 1st July. The twelve monthly average CPI above 536/115.763 points is determined twice in a year for the period ending December and June.

For arriving at Dearness allowance increase we need to know the All India Consumer Price Index for Industrial Workers [CPI(IW)] for the previous six months. For Dearness allowance revision w.e.f 1st January of a year, the CPI of July to Dec are required. For Dearness allowance revision w.e.f. 1st July of a year, CPI of Jan to Jun are required and so on.

The average CPI of the twelve months is then taken for calculation and the following formula is used :

New rate of Dearness allowance = (Average CPI for 12 months – 115.763 x 100) / 115.763

Additional rate of Dearness allowance = New DA rate – Old DA rate

The All India Consumer Price Index Numbers will be notified by the Labour Bureau on the last day of next month on its official website.

Example as follows…
AICPIN for the months for
Jul-11 193
Aug-11 194
Sep-11 197
Oct-11 198
Nov-11 199
Dec-11 197
Jan-12 198
Feb-12 199
Mar-12 201
Apr-12 205
May-12 206
Jun-12 208

Total = 2395
Average = 199.58

Calculation as follows…

2395 – 115.763 x 100
—————————- = 72.41
115.763

The total Dearness allowance with effect from Jan 2012 will be 72%.

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