DA & Linking Factor What's expected? DA Announcement and
linking factor explored.
As you all know that DA is calculated based on AICPIN.
AICPIN
is calculated based on the inflation and the cost of living in various
cities. So, what's going to happen in 7th Pay Commission, let's read.
In Pay Commission III, the base year was used as (1960
=100).
In
4th Pay Commission, the DA was decided to pay twice a year and also for
calculating the DA value the percentage increase in the 12 monthly
average of All India Consumer Price Index (base 1960). Also the base
year was (1982=100) as the base year.
In 5th Pay Commission, the DA was decided based on (1982=100) as the base
year.
In 6th Pay Commission, the DA was decided based on (2001=100) as the base
year.
In 7th Pay Commission, should we expect to have the base year as
(2011=100)?
When
the DA calculation change happened from base year 1982 to base year as
2001, there were a steep increase in the DA percentage, this is because
the cost of living has increased multifold and also various cities and
items was also included while calculating the real DA.
So, what's been recommend in the 7th CPC Report
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 and also check out the gazette notification
changes where the linking factor has been included as on AICPIN value as 2016.
IV. Dearness Allowance
| Sl.No. | Recommendation of the Seventh Central Pay
Commission | Decision of the Chief Justice of India |
|---|
| 1. | Existing formula and methodology
for calculating Dearness Allowance to continue (Para 8.17.37 of the Report)
| Accepted.
The reference base for calculation of Dearness Allowance after coming
into force of the revised Pay Structure shall undergo change accordingly
and will be linked to the
average index as on 01.01.2016 |
Though
in (2001=100) the linking factor was 4.63, this lead to the calculation
of DA with the average index as 115.76 as per 2005. For example, (2005 ,
12 Month Average Index 536, so the linking factor as per record was
4.63).
All India and Centre-wise Linking factors between New
Series of Consumer Price Index Numbers for Industrial Workers on base
2001 = 100 and the previous series on base 1982=100 (General Index).
Table No. 9.01
GROUP WISE LINKING FACTORS BETWEEN CURRENT SERIES OF ALL INDIA CONSUMER PRICE
INDEX NUMBERS
FOR INDUSTRIAL WORKERS ON BASE: 2001 = 100 AND
THE PREVIOUS SERIES ON BASE: 1982 = 100
| Group | Linking Factor |
|---|
| I-A | Food Group | 4.58 |
| I-B | Pan. Supari, Tobacco &
Intoxicants | 6.16 |
| II | Fuel &
Light | 4.77 |
| III | Housing | 6.18 |
| IV | Clothing. Bedding &
Footwear | 3.22 |
| V | Miscellaneous | 4.55 |
| GENERAL
INDEX | 4.63 |
Note:
Figures on previous base 1982 = 100 can be obtained by multiplying the
Index Number on current base 2001 = 100 by the linking factor and
rounding off the result to the nearest whole number.
As you all
now understand that the linking factor play a major role in getting the
DA value, but the linking factor for year 2016 .
I was not able to
find this data in Labour Bureau . We assume that if the linking factor
of 2016 used, then we expect to get a higher DA percentage (assumption).
This means it would be a real DA value as it would include various
cities and the current inflation and CPI.
We hope that when the
results are out they would be using the linking factor of 2016 as the
gazette notification has this mentioned. Normally the DA announcement is
release in September 1st week or 2nd week and hope this is announced
shortly.
Source :
7thpaycommissionnews.com
