The Union Cabinet approval for the 6% rise in the Dearness Allowance for the Central Government employees is expected to be announced on coming Thursday.
It is a well-known fact that every six months, the Central Government increases the Dearness allowance for its employees during the months of January and July. The increased amount is calculated on the price index (CPI IW BY 2001=100) of essential commodities. Rise in the Dearness allowance is being calculated on the basis of the changes in the prices of the essential commodities during the periods between January and June and the period between July and December.
The AICPIN Index Value is stand at the point "253" from Last 4 months i.e. from August-14 to December-14. Therefore the Additional Dearness Allowance, which is given once every six months, is likely to be 6% hike from January-2015. This is 1% less than the previous hike of additional Dearness Allowance from July-2014. The total Additional Dearness Allowance from Jan., 2015 will become 113% confirmed.
How Dearness Allowance is calculated ?
Month Year / CPI(IW) BY 2001=100 / Total / Average / App. DA / DA%
First is the month and year. Then the CPI (IW) Base Year 2001=100 and the relevant data. In the next column, you have the sum total of all the 12 months, i.e., the total of the declared AIPCIN numbers for the past 12 months. Next comes the division of the sum total by 12.
The next step is the most crucial one. You will have to find out by how much it exceeds 115.76. You will have to calculate the excess as percentage of 115.76.
(12 Monthly Average) – 115.76
-------------------------------------- X 100 = Percentage increase in prices
115.76
