Dearness allowance - DA is calculated based on AICPIN (All India Consumer Price Index Number). For calculating DA for July 2010 we are using this AICPIN.
What is Dearness Allowance ?
Dearness Allowance is granted to compensate the price hike above 536 points(Base Year 1982=100) 115.76 Points(Base Year 2001=100), to which the revised pay scales relate. This will be sanctioned twice a year, payable from 1st Januray and 1st July, reckonedon the following basis.
(i) The twelve monthly average price index above 536/115.76 Points is determined twice in a year for the period ending December and June.
(ii) The percentage increase is taken in whole number only and the fraction ignored
(iii) Neutralization will be 100% uniformly for all employees.
How to calculate Dearness Allowance:
(i) Dearness Allowance is paid on the Basic Pay as defined in FR 9(21)(a)(i)+NPA, if any (Personal Pay, Special Pay, etc., not included).
(ii) Fractions of 50 paisa and above to be rounded off to the next higher rupee and less than 50 paisa ignored.
(iii) For part of a month, rate of Dearness Allowance to be applied on the rate of pay+NPA and then Dearness Allowance for the number of days calculated.
(iv) In the case of daily-rated worker, monthly pay reckoned at 26 times his basic daily wages. Hence for part of a month, calculation of Dearness Allowance will be on Monthly pay + 26 x Number of days.
Current DA Rates for Employees:
The decision taken by the Government on the recommendations of the Sixth Central Pay Commission relating to DA, to decide that the DA admissible to all categories of Central Government employees shall be admisible from the dates mentioned below at the following rates:
Date Rate of DA
The expected All India Consumer Price Index number (AICPIN) for Industrial Workers Base 2001=100 for the month of May 2010 has been released by Statistical Department, Labour.
The AICPIN for the month of May 2010 is 172.
Based on AICPIN index, we calculated DA percentage for 1st July 2010.
|Month||All India Index||% of increase|
How to calculate percentage of increase ?
DA = (Avg of AICPIN for the past 12 months – 115.76) * 100 / 115.76 .
All India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100 for May 2010 increased by 2 points and stood at 172 (one hundred and seventy two).
If the index value remains 172 in June 2010, then % of increase value is 44.91, =June 10 % of Increase index value minus Jan 10 % of Increase index value.
= 44.91 (-) 35.7 = 9.21.
ie Minimum 9% percentage increase will be there in DA.
so DA will be 35 + 9 = 44 % .
AICPIN for June 2010 will be required to calculate the final value of DA.
Source: Swamy's Handbook 2010,igecorner.com , http://labour.nic.in/,
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