AICPIN for the month of July 2016

2% DA for the month of July 2016 - AICPIN for the month of July 2016

No. 5/1/2016-CPI
GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU
CLEREMONT, SHIMLA-171004

DATED: 31st August, 2016

Press Release

Consumer Price Index for Industrial Workers (CPI-IW) — July, 2016

The All-India CPI-IW for July, 2016 increased by 3 points and pegged at 280 (two hundred and eighty). On 1-month percentage change, it increased by (+) 1.08 per cent between June, 2016 and July, 2016 when compared with the increase of (+) 0.77 per cent between the same two months a year ago.

The maximum upward pressure to the change in current index came from Food group contributing (+) 1.65 percentage points to the total change. The House Rent index further accentuated the overall index by (+) 0.86 percentage points. At item level, Rice, Wheat, Wheat Atta, Besan, Black Gram, Gram Dal, Groundnut Oil, Eggs (Hen), Poultry (Chicken), Milk, Chillies Green, Garlic, Onion, Brinjal, Cabbage, Cauliflower, Gourd, Palak, Potato, Pumpkin, Banana, Sugar, etc. are responsible for the increase in index. However, this increase was checked by Fish Fresh, French Beans, Tomato, Electricity Charges, Petrol, etc. putting downward pressure on the index.

The year-on-year inflation measured by monthly CPI-IW stood at 6.46 per cent for July, 2016 as compared to 6.13 per cent for the previous month and 4.37 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 9.34 per cent against 8.33 per cent of the previous month and 3.21 per cent during the corresponding month of the previous year.

At centre level, Bokaro reported the maximum increase of 11 points followed by Munger-Jamalpur (10 points), Giridih, Agra and Delhi (9 points each). Among others, 7 points increase was observed in 4 centres, 6 points in 10 centres, 5 points in 5 centres, 4 points in 9 centres, 3 points in 8 centres, 2 points in 8 centres and 1 point in 5 centres. On the contrary, Mysore recorded a maximum decrease of 6 points followed by Mundakkayam and Coimbatore (5 points each), and Hubli Dharwar and Emakulam (4 points each). Among others, 3 points decrease was observed in 4 centres, 2 points in 2 centres and 1 point in 5 centres. Rest of the 8 centres’ indices remained stationary.

The indices of 33 centres are above All-India Index and other 43 centres’ indices are below national average. The indices of Vishakhapathnam and Mundakkayam centres remained at par with All-India Index.

The next issue of CPI-IW for the month of August, 2016 will be released on Friday, 30th September, 2016. The same will also be available on the office website www.labourbureaunew.gov.in.

EXPECTED DA CALCULATION FROM JULY 2016

DA is the most important allowance in existing Pay, if you look at the current basic DA is higher.

7th CPC Basic fixation has biggest influenced with the DA value. For this reason, after 7th Pay commission implementation, Central government staffs are looking out for how DA would be available.

In 6th CPC, everyone know how DA was calculated

In the above formula 115.76 was fixed based on the below interpretation

After implementation of Sixth Pay Commission report, Government ordered that the dearness allowance has to be calculated based on All India Consumer Price Index for Industrial Workers (CPI¬IW index) with the base year 2001-100. So, DA with effect from the period 1.1.2006, has to be calculated using average Price CPI-IW index of 536 for 2005 (base 1982-100) adjusted to the base year 2001-100 by dividing the same with the Linking Factor between 1982 and 2001 Series which is 4.63. As a result, the average consumer price index (Industrial workers) for 12 months in 2005 (base 2001-100) was worked out to 115.76.To calculate Dearness Allowance with effect from Jan-06, we need the average of monthly All India Consumer Price Index (IW) with the base year

2001-100 for the preceding 12 months and apply the same in the following formula:

DA – (Average AICPI-115.76)x 100/115.76

For example, to calculate the DA for 01/01/2007, we find that the average AICPI in the year 2007 -118.95. So, D.A. as on 01/01/2007 – (118.95 – 115.76)*100 /115.76 = 2%.

In 7th CPC entire calculation can change if we use the same combination. Let’s see, how this can change?
Based on it, in 2015 (base 2001 =100) Average is 261.40 and by using the same following formula the expected (assumed) DA in 7th CPC would be (261.4-261.4)*100/261.4 = 0% and July (277-261.4)*100/261.4 = 2%

In case the base year 2011-100 is used in 7th CPC, then the linking factor will be changed to calculate the DA Value.

7th CPC DA : A decade-long journey begins!

7th CPC DA : A decade-long journey begins!

“The Dearness Allowance calculations as per the recommendations of the 6th Central Pay Commission come to an end; the method prescribed by the 7th Central Pay Commission comes into effect from Jan 2016 onward…!”

The 7th Central Pay Commission was appointed in order to evaluate the methods of calculating the salaries, incentives, benefits, pensions, retirement benefits, and Dearness Allowance of the Central Government employees and serving and retired personnel of the Indian defence forces, and suggest changes, if and when required. Four months have passed since the Central Pay Commission submitted its final report to the Centre.

The government at the centre has the discretion to accept, reject, or modify the recommendations made by the Central Pay Commission. It has constituted a high-level committee to look into the various suggestions in the report. The final decision on the implementation of the recommendations will be made based on the feedback from this empowered committee.

Meanwhile, the Central Government employees federations met with the high-level empowered committee to discuss various issues, including Minimum Wages and Fitment Factor, and to suggest required amendments in the report.

There is likely to be a delay in the publication of the notification containing the accepted recommendations by the 7th Pay Commission. Since the election Model Code of Conduct will be in place until the last week of May 2016, the Government acceptance notification is expected to be published in the first week of June. In that case, there are chances that the revised salaries will be issued from the month of June. Also, the arrears for the past five months are also likely to be released then.

Dearness Allowance is one of the much-anticipated topics among Central Government employees. In its report, the 7th Central Pay Commission had given a short explanation about Dearness Allowance.

The 6th Central Pay Commission suggested elaborate changes in the method of calculating Dearness Allowance. This time however, the 7th Central Pay Commission did not suggest any elaborate changes. It has suggested that the same process be continued.


We have presented a ready reckoner of the procedures that were followed when the 5th Central Pay Commission drew to a close and the 6th Central Pay Commission came into effect, which are very likely to be followed this time too.

The AICPIN points of only the month of January are available as of now. The AICPIN points for February will be released tomorrow.

You can come up with approximate AICPIN points for the remaining four months to calculate the approximate Dearness Allowance.

As of January 1, 2016, according to the Centre, the Dearness Allowance stood at 125 percent. An order of the Ministry of Finance to this effect will be released soon. In the event that the 7th Central Pay Commission recommendations come into effect from January 1, 2016 onwards, the salaries of the Central Government employees will be revised by adding 125 percent to their basic pay. The new Dearness Allowance hike will be issued from 01.07.2016 onwards.

For example, if the basic pay of an employee, as on 01.01.2016, is Rs.12,000 (Grade Pay 2800 + 9200), his salary revisions and Dearness Allowance hikes as per the 6th and 7th Central Pay Commission recommendations, are given below.

Employee’s Pay as on 1.1.2016 as per the recommendations of 6th CPC
Basic Pay + 125% DA: 12000 + 15000 = 27000
Employee’s Pay as on 1.1.2016 as per the recommendations of 7th CPC
Basic Pay + No DA: 31000 + 0 = 31000

(No Dearness Allowance for the period between Jan to Jun 2016 and the first instalment of additional DA will be given only on 1.7.2016)

Source: 7thpaycommissionnews.in