Wednesday, 1 June 2016

DA from July 2016 set to increase by 6% or 7%

DA from July 2016 set to increase by 6% or 7%

Labour Ministry has announced the All India Consumer Price Index for April 2016 as 271, which is three points increase from the index for March 2016

DA from July 2016 set to increase by 6% or 7% on the basis of All India Consumer Price Index (Industrial Workers) with base year 2001=100, which has been recommended to be retained by 7th Pay Commission for calculation of Dearness Allowance

DA from July 2016 – An analysis – Labour Bureau, Govt of India has released the Consumer Price Index (IW) for the month of April 2016 yesterday.

Having actual All India Consumer price index for 10 months in hand, out of AICPI-IW needed for calculation of DA, an attempt has been made here to estimate the said DA from July 2016.

This DA estimation is based on Consumer Price Index (IW) with the base year 2001=100 which is being followed presently for calculation of Dearness Allowance applicable for Central Government Employees, Defence personnel and Pensioners.

7th Pay Commission has also recommended that the same consumer price Index could be retained for granting Dearness Allowance.

Here is the extract of analysis and recommendations of 7th Pay Commission relating to Dearness Allowance
“The VICPC had recommended that the National Statistical Commission may be asked to explore the possibility of a specific survey covering government employees exclusively, so as to construct a consumption basked representative of government employees and formulate a separate index. This has, however, not been done.
Keeping in mind that the present formulation of DA has worked well over the years, and there are no demands for its alteration, the Commission recommends continuance of the existing formula and methodology for calculating the Dearness Allowance.”

Hence, it is assumed that CPI-IW with the base year 2001=100 would be followed with effect from January 2016 on implementation of 7th Pay commission report as far as Dearness Allowance is concerned. In that case, after merger of DA of 125% with Basic Pay, DA from January 2016 would be calculated as 0%.

CPI-IW from July 2015 to April 2016

Month Actual AICPI-IW
July-2015 263
Aug-2015 264
Sep-2015 266
Oct-2015 269
Nov-2015 270
Dec-2015 269
Jan-2016 269
Feb-2016 267
Mar-2016 268
Apr-2016 271
May-2016 yet to be released
Jun-2016 yet to be released
Scenario 1: Possibility of increase in DA from July 2016 working out to be less than 6%
Possibility of increase in DA from July 2016 working out to be less than 6% is very remote due to the fact that the index should be getting reduced by at least 4 points in any one of the coming two months from the previous month and further reduction of at least 3 points in the other month.
In other words index for May 2016 should be getting reduced by 4 points to 267 and also witness further reduction by 3 points to 264, for increase in DA from July 2016 less than 6%. If index for May 2016 registers not more than 3 point reduction then index for June 2016 has to reduce at least by 4 points in order get the less than 6% increase in DA from July 2016

Calculation of DA from July 2016 based on CPI(IW) from July 2015 to June 2016

DA from July 2016 = [(263+264+266+

(5% increase in DA from July 2016)
@ Assumed CPI(IW) for May 2016 and June 2016
DA from July 2016 =[(263+264+266+

(5% increase in DA from July 2016)
@ Assumed CPI(IW) for May 2016 and June 2016

Scenario 2: Possibility of increase in DA from July 2016 working out to be 6%

Even if index gets lower by 3 points during both of these months compared to previous month, viz., May 2016 registers 3 point reduction from April and further three point reduction in June 2016 compared to May 2016, increase in DA from July 2016 will be 6%.

DA from July 2016 =[(263+264+266+

=131% -125% (6% increase in DA from July 2016)
@ Assumed CPI(IW) for May 2016 and June 2016

We are of the opinion that increase in DA from July 2016 registering at least 6% is quite possible as chances for CPI (IW) getting reduced to less than 265 from the present level 271 in two months is very remote.
Scenario 3: Possibility of increase in DA from July 2016 working out to be 7%
If CPI (IW) gets increased at least by 2 points in any one of the coming two months and by 1 point increase in the other month compared to previous month, then DA from July 2016 will be poised for an increase of 7%.

In other words, if consumer price index for May 2016 and June 2016 witnesses at least 2 point increase and further 1 point increase respectively or vice versa, increase in DA from July 2016 is calculated to be 7%

DA from July 2016 =[(263+264+266+

=132% -125% (7% increase in DA from July 2016)
@ Assumed CPI(IW) for May 2016 and June 2016
DA from July 2016 =[(263+264+266+269+

=132% -125% (7% increase in DA from July 2016)
@ Assumed CPI(IW) for May 2016 and June 2016

Considering the inflationary trend shown by 3 point increase in April 2016, this scenario may become a reality. In that case DA from July 2016 will be 7%

Scenario 4: Possibility of increase in DA from July 2016 working out more than 7%

In order to get an increase in DA from July 2016 more than 7%, CPI(IW) for both May 2016 and June 2016 should witness at least 7 point increase from the present level of 271. If any one of this month registers lesser increase than 7 points then the other month has to compensate the same by registering increase of index by more than 7 points.

It is apparent that possibility for such an increase in CPI(IW) is not at all Possible. Hence we can conclude that increase in DA from July 2016 may not be more than 7%.

Abolition of 85 percent post falling vacant meant for direct recruitment in the grade of JSA-Reminder No 2

Abolition of 85 percent post falling vacant meant for direct recruitment in the grade of JSA-Reminder No 2

Reminder No.2

No. 13/3/2016-CS.II(B)
Government of India
Ministry of p.ersonnel, Public Grievances & Pensions
Department of Personnel and Training
(CS.II Division)

3rd Floor, Lok Nayak Bhawan,
Khan Market, New Delhi – 110 003.
Dated: 31st May, 2016.


Subject: Abolition of 85% post falling vacant meant for direct recruitment in the grade of JSA (erstwhile LDC) – reg.

The undersigned is directed to refer to this Department’s O.M. of even number dated 5th May, 2016 on the subject mentioned above and subsequent reminder dated 19th May, 2016 011 the subject mentioned above.

2. The Ministries/Departments shown in the Annexure are requested to take necessary action to abolish the remaining posts immediately and furnish a compliance report to DoP&T immediately along-with a copy of the Office Order of the number of posts abolished.

Encls: Annexure.

(Rajesh Sarswat)
Under Secretary to the Govt. of India
Tel No. 24654020


Cabinet approves Mau-Tarighat New Railway line project

Cabinet approves Mau-Tarighat New Railway line project

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for a new broad gauge line between Mau Station of North Eastern Railway and Tarighat Terminal station of East Central Railway. The total length of this new broad gauge line will be 51 kilometers.

The estimated cost of the project is Rs.1765.92 crore and expected completion cost is Rs.2109.07 crore with 5 percent escalation per annum. The project is likely to be completed in the next six years during 12th and 13th Plan period.

This project will provide alternative, shorter convenient and better transport infrastructure to the area separated by river Ganga so as to remove the transport difficulties in the area and to boost the socio economic development. The catchment area of project line will serve passenger requirement and will facilitate the people of the area for travelling to different parts of the country. In addition, this new line will provide an alternative route connecting Northern and East Central railway via NE Railway. This project line has huge potential in enhancing railway traffic and also gives opportunity to develop this area by providing more efficient transportation system.

The new line crosses the river Ganges at the downstream of existing road bridge for NH 97 and is located almost parallel to it and joins the existing BG line from Tarighat to Dildar Nagar. This line will be alternative route for train passing from Howrah to New Delhi and back. Construction of this line will provide a link to Allahabad-Patna double line electrified section. It will also decongest the Allahabad-Mugalsarai-Patna route particularly around Mugalsarai yard.


Cabinet approves the Proposal for Amendment to the Resolutions dated 03rd March 1987 of the Public Enterprises Selection Board (PESB)

Cabinet approves the Proposal for Amendment to the Resolutions dated 03rd March 1987 of the Public Enterprises Selection Board (PESB)

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given its ex-post facto approval to the proposal for Amendment to the Resolutions dated 3rd March 1987 of the Public Enterprises Selection Board (PESB). The proposed amendments are as under:

(a) selection of candidates from State Public Enterprises and Private Sector as non-internal candidates for a period of five years for appointment in Central Public Sector Enterprises (CPSEs);

(b) holding of office by the Chairperson and Members of the Public Enterprises Selection Board (PESB) for a period of 3 years from assumption of charge or until attaining the age of 65 years or until further orders whichever is earlier;


To broadbase the catchment for senior positions in Central Public Sector Enterprises (CPSEs), the policy of allowing candidates from State Public Sector Enterprises (SPSEs) and Private Sector has been in place. This is proposed to be further extended for another five years with other requisite changes for effective discharge of Public Enterprises Selection Board (PESB) functions.

The amendment will continue to provide a wider pool of professionals for selection by impact allowing the candidates from State Public Sector Enterprises (SPSEs) and private Sector to be considered for senior positions in the Central Public Sector Enterprises (CPSEs).

Central Public Sector Enterprises (CPSEs) would also benefit by the skill-sets and domain expertise of those coming from the State Public Sector Enterprises (SPSEs) as well the private sector. It would also ensure that the Central PSE senior management gets the benefit of the perspective gained both within and outside.


National Pension System (NPS) : PFRDA

National Pension System (NPS) : PFRDA



A. Launch of NPS and Current scenario

1. The National Pension System (NPS) was introduced in 2003 for all Central Government employees (except armed forces) who joined the service on or after 01.01.2004. The NPS marked a paradigm shift from the Defined Benefit Pension Scheme to Defined Contribution Scheme, thereby easing the escalating fiscal stress on the Government on account of rising pension liabilities. In 2009 different Schemes under the flagship of National Pension System were launched under the private sector and unorganised sector.

2. The National Pension System (NPS) has been arguably hailed as one of the best designed pension products domestically with its several unique features like full portability across jobs and geographical jurisdictions, choice of investment options to suit different risk appetites, option to choose from among several fund managers, no entry or exit loads, and perhaps the lowest fund management charges in the world. It is also regulated by a dedicated regulator.

3. The passage of the PFRDA Act in September 2013 followed by notification of the Act on 1st February 2014 marks an important milestone in the history of the Pension Sector reforms as the Act provides an overarching mandate to the PFRDA for promotion and development of old age security in India. In light of the paradigm shift in the pension landscape in the country, it is imperative to review the progress of NPS so far and realign the existing policy framework for Pension Funds within the mandate of the Act.

4. The NPS adopted a direct selling model to keep the costs low and to avoid the urge to mis-sell due to the embedded commissions. This distributor-free and agent-free model was designed to protect the individual and to maximise the pension wealth. It was adopted even at the risk of a slow start. The NPS architecture has been designed to create an enabling environment for the citizens to save for retirement.

5. Additionally, NPS also provides flexibility to subscribers where they can switch their pension funds among three options, i.e. equity, corporate bonds and government securities. They can also change their fund managers if they are not satisfied with the performance of Pension Funds.

B. Need of Revamping
  • It is more than 12 years under NPS Govt. Sector and 6 (six ) year since NPS was introduced in the market to cater to the retirement needs of Private Sector/Unorganised Sector subscribers.
  • The NPS has made noticeable progress from the time of its inception, on boarding about 1 Crore subscribers with a total AUM exceeding 100000 crores by Dec 2015, with only 12% of the workforce covered by any kind of old age security in India, there is thus a huge untapped potential for NPS to expand. However, this would require multipronged approach with co-operation of multiple stakeholders including Central Government, State Governments, Autonomous bodies, trade bodies, Regulators and many more.
  • Besides the expansion in coverage, the provision of old age income security also entails working towards adequacy of income post working life, which can be done by optimizing returns through appropriate investment guidelines. While devising the investment guidelines, the interest of the subscriber is to be kept paramount, balancing the security aspect with adequacy of returns. While returns on investment under DC scheme cannot be guaranteed, it is important to frame guidelines, which enable the pension funds to deliver good real rate of returns to the subscriber for meaningful old age income security, which cannot be done with overload of fixed income securities. Hence, an enabling environment is required to be created for the Subscriber to maximize his/her returns depending upon his/her risk appetite.
  • The fiscal stimulus being provided by the Government each year through its budget announcements are a major boost to the NPS , propelling the built up of a pensioned society.
  • The experience gained since last more than decade this has been quite obvious that the NPS system has a well laid out architecture, it has been able to draw enough attention from the individual subscribers by very little marketing and publicity. It is also perceptible that investor awareness towards the various financial products has grown to the extant where subscribers can decide about the mix of asset class and Pension Fund and change the same as per its discretion.


1. Earlier Government, the pension funds of the Central Government employees are currently being allocated amongst the three public sector pension funds (UTI PFM, SBI PFM, LIC PFM) in the ratio of their returns. The investment pattern for the Central Govt. employees is also stipulated by the Government, having a preponderance of fixed income securities, which can currently go upto 95% while the maximum exposure in Equities is restricted to 15%

2. In the early stages of the movement from Defined Benefit to Defined Contribution, what propelled the Govt to make these choices was, perhaps, the over-riding concerns towards shielding the savings of beneficiaries from volatility and risk, and protecting it from capital erosion. These anxieties seem justified and essential for the development of NPS in its nascent stages. The Directed Investment regime was also in keeping with the low financial literacy levels in the country and underdeveloped financial and nascent regulatory environment in the pension sector at that time.


Reasoning: Key reasons to claim choice to the Govt. employee from are –

1. Shift in risk from employer to employee: It cannot be over emphasised that the movement from DB scheme to NPS marks a shift in onus of funding the old age income security from the employer to the individual employee, through his/her individual retirement accounts.

2. Mandate under PFRDA Act 2013: It is in this back ground that the PFRDA Act provides for opportunities to the subscriber to maximise his returns in the risk return paradigm. Section 20(2) of PFRDA Act, 2013, states that there shall be a choice of multiple pension funds and multiple schemes. Hence, post the notification of the PFRDA Act, there is need to align the investment framework for the Govt employees including Central Govt employees.

3. Parity with other subscribers: The subscribers under the private sector are already enjoying a choice in the selection of Pension Fund Manager(both public and private sector PF) as well as the choice to allocate funds amongst the three asset classes (Equity(E), Corporate Debt (C) and G ( Govt securities) with only ceiling of 50% on equity. On the other hand, the investment pattern for the Central Govt employees prescribes preponderance of fixed income securities, which can currently go upto 95% while the maximum exposure in equities is restricted to 15%, effectively limiting subscriber choice.

4. Recommendations of the Bajpai Committee report (2015) : The recently released report of the Bajpai Committee has also recommended the opening of the choice of pension funds and allowing same investment pattern as permitted to the private sector employees.

a) Choice of the pension funds

1. The current process restrict the deployment of funds of the Central Govt. employees across the three Public Sector PFs only. In the first place, this prevents the employees to choose a pension fund(even amongst public sector PFs as they are restricted to a combination of three Public sector PFs) Secondly ,this dispensation disallows them to tap the expertise of the Private sector pension Funds. Not only is this discriminatory on the grounds of equity, this also militates against the spirit of the PFRDA Act which provides for choice of the Pension fund under section 20(2).

2. It may not be out of place to mention that the PFRDA Act further provide for at least one public sector Pension fund. Hence, those Govt sector employees always have the option of choosing a public sector Pension Fund. However, this has to be the conscious decision of the employee, based on his perception of the performance of the Pension Fund, rather than a mandate by the employer.

3. The opening of choice of Pension funds to the Central Government employees will not only benefit the employees but also galvanise the pension sector in more ways than one. It would create competition amongst the pension funds, both public sector and private sector- to vie for the pension corpus. Enhanced size of the market will also attract more players in Fund Management space leading to greater specialization, risk diversification, risk management and enhanced governance standards and better performance across the industry. The concomitant result would be increased efficiency in both pricing & servicing and higher levels of subscriber satisfaction. Hence, for the benefit of subscribers and development of the pension sector as a whole, it would be desirable to allow market forces to determine the size of the pension corpus managed by a pension fund rather than through a mandated / directed regime. This has also been recommended by the Bajpai committee as stated below.

   " The restriction of allowing Pension funds only from the public sector to manage the funds of Government employee subscribers may be done away with. This will also be in keeping with the mandate under the PFRDA Act to provide choice to the subscriber. On the other hand, the enhanced competition and the appurtenant economies of scale shall go a long way in building a healthy pension corpus for the subscriber.”

4. However, as approved by the Board, the default option for central Govt employees could continue be the combination of three Public sector Pension Funds as hitherto. Subsequently, this could be moved to one pension fund from the public sector and finally to any pension fund, selected as default Pension Fund.

b) Choice of investment pattern

1. The existing investment pattern prescribed for the Govt employees is broadly based on the guidelines stipulated by the Govt from time to time. Currently, the guidelines for the Govt sector are being revised broadly based on the Govt OM no 11/14/2013-PR dated 7th April 2015. The Govt. guidelines stipulate investment of minimum 80% in fixed
income securities- Govt securities and corporate bonds- which can go upto 95%.Investment in equity has been mandated between 5 to 15%.

2. As per the Bajpai Committee report (2015),

“ The design of the mandated investment norms in vogue today with predominance of low risk fixed income securities, that too mainly Government securities, has lower tolerance for risk, but a high tolerance level for lower returns especially in case of the Government Sector employees. This is, in the opinion of this Committee, unfair for the investors who may need a combination of low risk with moderate returns or even higher returns with higher risks. This is especially true for those in the early stages of their saving curve. There can be no denying that in the pursuit of risk-free investment, investors are getting the short shrift and are therefore revealing a preference for physical assets.”

3. On the other hand, guidelines for the private sector allows the subscribers to allocate their contribution across the three asset classes – Equity, Corporate bonds and Govt securities with only restriction of investment in equity upto 50% . Thus, on the grounds of parity, and keeping in view the spirit of the PFRDA act to allow choice of schemes, it is essential to revisit the framework for investment by the

Central Government employees and allow them choice of investment as available to the Private Sector employees.

4. This has also been recommended by the Bajpai Committee ( 2015) as under:-
“Multiplicity of investment mandates across various Regulatory Regimes within the domain of pension sector creates an uneven playing field and therefore there is an urgent need to harmonise the same. The existing investment norms across all regulatory regimes be harmonised, at least till such time as the move to a prudent investor regime is complete. This creation of a harmonised regime will usher in transparency and allow investors to compare their returns across product platforms. A beginning can be made by harmonizing the investment guidelines within NPS across Government and Private Sector i.e. loosening the guidelines for Govt sector to allow more play to the Pension Fund managers in asset classes like equity, which are historically known to beat inflation across various countries in the long run.

5. It is also pertinent to mention that the capital market has also been evolving rapidly with new instruments being offered and the opportunities for investors growing. With the shift of burden of funding the retirement income resting on the employee, it is important to create a facilitating environment to enable him to plan his retirement judiciously through prudent investments based on his risk appetite.

6. The opening of the Govt sector, which comprises the majority of the AUM of the NPS, will have cascading impact on the development of the capital market, and the development of the economy as a whole. A step in this direction has already been taken by the Govt by mandating minimum 5% investments in the equity in its OM no 11/14/2013-PR dated 7th April 2015. Harmonisation of the investment guidelines between private and Govt sector will also pave way towards a more unified pension regime in the country.

The opening of the choice to the Central Govt employees would be a first step in opening the choice to all the NPS subscribers as under:-

a) Choice of Pension Funds across all pension funds to all the subscribers under NPS including Govt Sector employees ( APY is a DB cum DC scheme and hence will be out of the purview )

b) Choice of investment pattern ( Choice of equity , Debt and Govt Securities) across all pension funds to all the subscribers under NPS including Govt sector employees . ( APY is a DB cum DC scheme and hence will be out of the purview)

Note: Comments may be offered vide e-mail on or in hard copy to the below address-

Ms. Sumeet Kaur Kapoor

Pension Fund Regulatory and Development Authority
1st Floor, Chatrapati Shivaji Bhawan
B-14/A, Qutub Institutional Area
New Delhi-110016

Source : pfrda

AICPI-IW – All India Consumer Price Index for Industrial Workers for April 2016 released

AICPI-IW – All India Consumer Price Index for Industrial Workers for April 2016 released

AICPI-IW – All India Consumer Price Index for Industrial Workers for April 2016 released by Labour Ministry – Three points increase from March 2014

‘CLEREMONT’,     SHIMLA-171004
DATED:   31st May, 2016

Press Release

Consumer  Price Index for Industrial  Workers  (CPI-IW) – April, 2016

The All-India CPI-IW for April, 2016 increased by 3 points and pegged at 271 (two  hundred  and  seventy  one).  On  l-rnonth  percentage  change,  it  increased  by (+)  1.12 per cent  between  March,  2016 and April,  2016 when  compared  with  the increase of(+)  0.79 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  (+)  2.65  percentage  points  to the  total  change.  At  item  level, Wheat, Arhar Dal, Gram Dal, Masur Dal, Urd Oal, Groundnut Oil, Poultry (Chicken), Milk, Chillies Dry, Chillies Green, Potato, Tomato,  Seasonal Vegetables and Fruits. Tea (Readymade), Sugar, Doctors’  Fee, Petrol, Tailoring Charges, etc. are responsible for the increase in index. However, this increase was checked  by Rice, Fish Fresh, Garlic, Onion, Soft Coke, Flower/Flower  Garlands, etc., putting downward  pressure on the index.

The year-on-year  inflation measured by monthly CPI-IW stood at 5.86 per cent for April, 2016 as compared to 5.51 per cent for the previous month and 5.79 per cent during the corresponding  month of the previous  year.  Similarly, the  Food  inflation stood at 7.55 per cent against 6.16 per cent of the previous  month and 5.30 per cent during the corresponding month of the previous year.

At centre level, Rourkela reported the maximum increase of 10 points followed by  Goa  (8  points),   Angul-Talcher,   Rangapara-Tezpur,   Warrangal,   Sholapur  and Varanasi (7 points each). Among others, 6 points increase was observed in 3 centres,S points in 10 centres,  4 points in 15 centres,   3 points  in 11 centres,  2 points in 11 centres and  1 point  in  11 centres.  On  the  contrary,  Quilon  recorded  a  maximum decrease of 5 points followed by Madurai (3 points), Salem and Rajkot (2 points each) and  Tiruchirapally  and  Ghaziabad  (1  point  each).  Rest  of  the  4  centres’   indices remained stationary.

The  indices  of  35 centres  are  above  All-India  Index  and  other  41 centres’ indices are  below  national  average. The  indices of Vishakhapatnam  and Ludhiana centres remained at par with All-India Index.

The next  issue of CPI-IW  for the month  of May, 2016  will  be released  on Thursday,  30th  June,  2016. The same  will also  be available  on the office website

Source: Labour Ministry Press Release dated 31.05.2016

Prepare for struggle on 7th CPC issues

Prepare for struggle on 7th CPC issues


The Staff side had demand of minimum wage of Rs 26000/- & fitment formula of 3.71. Against this the 7th CPC had recommended minimum wage of Rs 18000/- & fitment formula of 2.57. The 7th CPC recommendations has provided only at 14% wage hike at Group “C” level it is only ranging from Rs 2240/- to Rs 3500/- increase per month, and at Group “B” level ranging from Rs 4000/- to Rs 6500/- increase per month. This increase is lowest by any pay commission, hence vast changes are required as the prices of essential commodities have gone up and also the inflation rate has gone up.

There are various reports on 7th Central Pay commission on the media reports on minimum wage of Rs 21000/- & fitment formula of 3.00, (which is at 34% wage hike against the 14% wage hike recommended by the 7th CPC). These reports are totally wrong and not true, these reports divert the Central Government Employees from the struggle path. Now it’s clear from the meeting of the staff side leaders with the Cabinet Secretary that there will likely hood of the slight increase in minimum wage, but not be any changes in the fitment formula. This is against the Staff side demand of minimum wage of Rs 26000/- & fitment formula of 3.71.

Secondly there is no change in allowances expect HRA that too its rates are reduced by the 7th CPC and also many allowances have been withdrawn. This is saving for the Government.

Comrades it is the time to struggle, we should educate the members and prepare for struggle, so that we should get at least 50 % wage hike without allowances, as allowances are not taken into pension benefit.

Only struggle will get us benefit. Please don’t believe on rumours. Now it is now or never. Serve strike notice on 9th June 2016.

Comradely yours
General Secretary

Source –

Flash News

DA Jan 2022 - Grant of Dearness Allowance to Central Government employees - Revised Rates effective from 01.01.2022

 3% DA Hike - Revised Rates effective from 01.01.2022: DoE OM dated 31.03.2022 No. 1/2/2022-E-II (B) Government of India Ministry of Finance...