Published On: Wed, Jan 14th, 2015

Central employees entitled to 6 percent DA hike from January

New Delhi: : Central government employees will be entitled to 6% additional dearness allowance (DA) with effect from January 1, 2015, taking it to 113% of their basic pay.

Finance Minister Arun Jaitley

Finance Minister Arun Jaitley

DA is linked to the consumer price index (industrial workers). The government uses CPI-IW data of the past 12 months to arrive at a quantum for calculating any DA hike.

The increase DA is in accordance with the accepted formula, based on recommendations of the 6th Central Pay Commission. According to the formula, DA is calculated on the basis of the 12-month average of the Consumer Price Index for Industrial Workers.

The consumer price index (industrial workers) has remained stationery at 253 for last four months August to November and even for December, 2014; it is likely to remain same.

The CPI (IW) of other months January, February, March, April, May, June and July are 237, 238, 239, 242, 244, 246 and 252 respectively.

As such, the retail inflation for industrial workers between January 1 to December 31, 2014 would be used to take a final call on the matter.

Accordingly, the average inflation during this period had stood at 6.3 per cent.

In the above scenario, there is not so much scope for DA increase more than 6 percent from January, 2015.

However, the employees’ bodies are pressing hard to merge 50 percent dearness allowance (DA) with basic pay to provide relief to employees.

With merger of DA with basic pay, the salary and allowances paid in proportion of basic pay are increased. As per earlier practise DA was merged with basic pay once it breached 50% mark. But 6th Pay Commission has disallowed it.

TST

About the Author