7% D.A hike is expected from 1st July 2012

7% D.A hike is expected from 1st July 2012

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The Dearness Allowance payable to Central Government Employees and Pensioners is determined based on All India Consumer Price Index for Industrial Workers. AICPI (IW) for the month of June 2012 has increased from 206 to 208.Basing on the calculation, there will be 7% increase and the expected D.A from 1st JULY 2012 is 72%. DA with effect from 1st July 2012 would be officially announced during September/October 2012.

 

The D.A calculation is as follows :-

To calculate Dearness Allowance we require AICPI (IW) for previous 12 months.

 

Dearness Allowance with effect from 1st January every year	(Average of AICPI-IW for the months from January to December of previous year – 115.76)X100/115.76
Dearness Allowance with effect from 1st July every year	(Average of AICPI-IW for the months from July of previous year to June of this year – 115.76)X100/115.76
115.76 is a factor which converts 1982 series AICPI (IW) (Base 1982=100), which was applicable prior to 6CPC to 2001 series AICPIW (Base 2001=100). In turn, This is arrived at by dividing the 1982 series AICPI by a linking factor which is 4.63 (536/4.63=115.76)

 

Calculation of DA with effect from 1st July 2012 :-

 

Month	AIl Indian Consumer Price Index (AICPI-IW)
July 2011	193
Aug 2011	194
Sep 2011	197
Oct 2011	198
Nov 2011	199
Dec 2011	197
Jan 2012	198
Feb 2012	199
Mar 2012	201
Apr 2012	205
May 2012	206
Jun 2012	208

 

Average of AICPI (IW) for the period from July-2011 to June-2012 :-

(193+194+197+198+199+197+198+199+201+205+206+208)/12	= 199.58
DA with effect from 1st July 2012	= (199.58-115.76)X100/115.76)
	= 72.41
	Rounded to 72