7th
CPC DA Calculation – Important factor of AICPI (IW) BY 2001 continue or not..?
Dearness Allowance is
one of the important issues that the Pay Commission deals with. The calculation
method that was recommended by the 6th Pay Commission was radically different
from the ones suggested by all the previous Pay Commissions. Dearness
Allowance, which was increasing by 1 or 2% until the 5th Pay Commission
suddenly shot up to the peak of double-digit numbers.
Until the 5th CPC, the
Consumer Price Index Number for Industrial Workers 1982 = 100 was used for
calculating dearness allowance. From the 6th Pay Commission onwards, CPI (IW)
2001=100 was used for calculating the DA.
There was another
crucial change that the 6th CPC made. It recommended that the Reference Base
Index be changed from 306.33. As a result, 115.76 became the new Reference Base
Index from 01.01.2006 onwards.
Will the 7th CPC
introduce a new CPI (IW)? Or will it bring about changes in the Reference Base
Index?
This is something that
everybody wants to know.
Just watch the
difference between 5th and 6th CPC DA Calculation methods…
5th CPC calculation
method is given below…
The extant formula for
calculation of DA till 1-1-2004 was:
12 Monthly Average – 306.33
——————————————————– x 100 = percentage increase in prices
306.33
——————————————————– x 100 = percentage increase in prices
306.33
The Fifth Pay
Commission had recommended that DA should be converted into DP each time the
CPI increased by 50% over the base index. The Government merged 50% of DA with
the basic pay w.e.f. 1-4-2004. The formula for calculation of DA for the period
from 1-7-2004 is :
12 Monthly Average – 306.33
{ ———————————————— x 100} – 50 = percentage increase in prices
306.33
{ ———————————————— x 100} – 50 = percentage increase in prices
306.33
6th CPC calculation method is given below…
(12 Monthly Average) – 115.76
——————————————————– x 100 = percentage increase in prices
115.76
——————————————————– x 100 = percentage increase in prices
115.76
