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It is expected that a DA hike by 7% for the Central Govt. Employees will be effective from July, 2012.
Anyone can help me to understand:
1. How % DA calculated? ( 6% or 7% or 10% etc.)
2. How State Govt. function about declaring DA after Central Govt?
Dearness Allowance is granted to compensate the price hike above calculated on the basis of AICPI figures 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, reckoned on 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.
Now, what is AICPI? The full form of AICPI is All India Consumer Price Index. It is a numerical representation of monthly movement of price of a fixed basket of commodities and services at 78 important places across India. The monthly figures of AICPI are published regularly by statistical organizations of the Central Govt., generally on the last working day of each month following.
After each 6 months, in March and September, when the AICPI data upto preceding December and June respectively become clear, the Govt. calculates the percentage increase of the index over the base figure during the last 12 months period (not 6 month) i.e, upto Dec and June and declares the additional DA installment equal to the increase in AICPI in percentage term.
Any figure after the decimal position in the final AICPI increase percentage data is ignored and carried forward to the next installment. Thus we always get whole number as DA compensation.
Hope I could make myself clear. This is the procedure followed by the Central Govt. and 100% compensation of DA, half yearly is supported by statutory provisions for Central Govt. Servants. Whereas, State Govt., as far as my memory goes, always trails Central Govt. in respect of DA and my understanding is that they declare DA for their employees as per the whims of the FM or CM concerned or when there is impending pressure on them to please the state employees in general. I may be completely wrong in this issue. Correct me if I am. But the system in State is not as transparent as that in Central Govt.
So, the percentage increase in price of essential commodities in 6 months is the % of DA declared. Am I right?
Is there any mechanism by which Central Govt. monitor State Govt. regarding this issue?
So, the percentage increase in price of essential commodities in 6 months is the % of DA declared. Am I right?
Yes, you are almost there. Only that the increase announced half yearly is an average of last 12 months’ monthly numbers of AICPI.
Is there any mechanism by which Central Govt. monitor State Govt. regarding this issue?
I am not aware of any mechanism like this. However, views of more knowledgeable friends in this regard are very much welcome.
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