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“Expected DA Jan 2016” gets carefully scrutinized by the 7th Pay Commission

“Expected DA Jan 2016” gets carefully scrutinized by the 7th Pay Commission

"This time, it is not just the employees, but the members of the 7th Pay Commission too who are very eager to know about the Dearness Allowance from January 2016. "

'Expected DA January 2016' has the honour of making not just the Central Government employees and pensioners curious; it has even got the 7th Pay Commission on the list of eagerly waiting audience.

It is a well-known fact that Central Government employees love to read all kinds of information, analyses, orders, and predictions about the Dearness Allowance. Here are our fact- and trend-based predictions for the additional Dearness Allowance which will be announced from 01.01.2016. 

Calculation of DA : The Government of India presently calculates the level of inflation for purposes of grant of dearness allowance to Central Government Employees on the basis of the All India Consumer Price index Number for Industrial Workers (2001=100) (AICPI). The twelve monthly average of the AICPI (2001 base) as on 1st January and 1st July of each year is used for calculating the Dearness Allowance (DA).

Each month, the Central Government’s Labour Bureau releases price-related data called the CPI (IW) on Base Year 2001=100. 78 important cities and towns from all over the country were selected and the fluctuations in prices of essential commodities in all these places are noted. Based on these data, the points, abbreviated as AICPIN, are calculated. The Pay Commission will, in its report, explain in detail how the DA is calculated based on these statistics, known as the ‘DA Determination Formula.’

The Dearness Allowance of not just the Central Government employees, but also the state government employees, is being paid as per the method prescribed by the 6th Pay Commission. The DA calculation method was implemented from January 2006 and will continue to be in effect for ten years, until December 2015. This DA determination method comes to an end now due to the constitution of the 7th Pay Commission.

Implementation of 7th CPC : The 7th Pay Commission is expected to submit its recommendations to the government before December 2015. Its recommendations are expected to be implemented from January 2016 onwards. 

Dearness Allowance after 1.1.2016 : After 01.01.2016, Dearness Allowance will be issued based on the prices of essential commodities, as per the method recommended by the 7th Pay Commission. For example, the 6th Pay Commission’s recommendations were implemented from January 2006 onwards. The DA for the months of January 2006 to June 2006 was not paid. DA was issued only from the month of June 2006. 

DA Calculation Method of the 7th Pay Commission : Successive Pay Commissions have made changes to the DA formula, suggesting their own methodology for determining the quantum and frequency. The 7th Pay Commission will also expected to recommend a different methodology to determine the DA.

One cannot say for sure that the 7th Pay Commission will follow the method that was recommended by the 6th Pay Commission. It could modify the current CPI(IW) BY 2001-100 statistics index. It could also change the current “Linking Factor 115.76” method. It is difficult to predict how these factors would differ in the recommendations of the 7th Pay Commission report. 

Expected DA January 2016 : The Dearness Allowance from January 2016 will be calculated based on the AICPIN points for the six months starting from July 2015. The AICPIN points of only three months have been released as of now. Expected DA for January 2016 can be calculated only after the AICPIN points of October, November and December are released. On a fair guess, assuming that the AICPIN points remain the same for the remaining three months, one can expect Dearness Allowance of 6 percent and the total Dearness Allowance will increase by 125 percent. Unless there is a dramatic change in the AICPIN points, the total Dearness Allowance will very likely be around 125 percent. 

The relationship between the 7th Pay Commission and the DA : The quantum of Dearness Allowance mentioned above is an important aspect for 7th Pay Commission. It is based on this number that the much awaited Revised Basic Pay will be calculated. For instance, the amount of total DA percentage will be added to the current Basic Pay and to this, the weightage to be reommended by the 7th Pay Commission will be added and the new Basic Pay will be arrived at. 

The AICPIN points for the month of December 2015 will be released only in January 2016. Only then will it be possible to accurately calculate the Dearness Allowance from January 2016.

The 7th Pay Commission is expected to submit its report to the Central Government by December 2015. It remains to be seen how the 7th Pay Commission has calculated the final Dearness Allowance percentage.


Anonymous said…
How to determine the DA from Jan 2016 for the purpose of calculation of revised pay in 7th cpc? I want to clarify my question.
Unknown said…
Sir old gov employ ko pichle pay commison me kuch fayada hua hi pament badi hi padi gov unki retirement age badakar 65 karede to o bhi apna future bana sakti hi new employ ki jaroor kam kar sakte hi
Unknown said…
7 Cpc report ki phir revision kiya jay soch samajhkar report de galat decision age ghate ka kam ho sakta hi
Dearness Allowance/Dearness Relief due from 01.01.2016 can still be an entitlement under the existing formula.Seventh pay commission in that case with effect from 01.01.2016 may be implemented after 02.04.2016.This method will accrue reasonable benefits to Civil Side including family pensioners...
Unknown said…
One cannot predict now Seventh PC may either retain the same formula or alter it
j.s.kalra said…
Anonymous said…
Increase in Dearness allowance never helped the government employees economically. DA increase always resulted in inflation and the rise in prices is much more than the increase in DA. All people of the country, not central government employees only, suffered by inflation. In last ten years the DA increased to 119% but the cost of essential commodities increased by 300 to 500%. It will be beneficial if the system of DA is got rid off once for all. No where else in the world this system of Dearness Allowance is practised. In India the DA system was introduced during the second world war. The mill owners wanted this system favourable to them and hence prices of all commodities were not included in calculating the DA rise. Ultimately the employees and the people of the whole country suffered because of inflation.
Unknown said…
Sir, the best is to commence pay commission every 5 or 7 year, instead of present 10 years interval.
Unknown said…
Sir, constituting pay commission at an interval of 10 years is not fair compared to othr organisation. It should atleast be 5 or 10 years

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