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Expected Dearness Allowance from January 2013 vs AICPIN-IW

5 Comments / By G. Buvaneswari / January 3, 2013

The rate of dearness allowance payable to central government employees might be enhanced from 72% to 80% with effect from January 2013

All India Consumer Price Index Number for Industrial Workers is the only Index watched keenly by each and every Central Government Employees now. Because the rate of Dearness allowance granted twice in a year for cg employees is determined by this Index only. It is irony that no one is happy to see the hike in prices of essential commodity, but all the government servants are eagerly awaiting to know how much the rate of Dearness allowance will be increased at the end of every 12 months from the month of January and July. The interesting thing to be noted in dearness allowance vs AICPIN_IW is that the AICPIN-IW reflects the increase in the prices of basket of essential commodities, whereas, the rate of dearness allowance reflects the increase or decrease in AICPIN-IW. It is quite obvious that the AICPIN – IW is always in the trend of increasing mode due to the price rise, so as the rate of dearness allowance is also increasing twice in a year.

Whatever the impact on the exchequer of the government on account of releasing additional installment of dearness allowance and dearness relief is inevitable. The additional installment of dearness allowance and dearness relief to central government employees and pensioners is released particularly to compensate for price rise. The increase is determined in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission.

To determine the exact rate of dearness allowance to be increased, we need the AICPIN – IW for the month of December 2012. Although, as per the past eleven month’s Consumer price Index number for Industrial workers, it is expected that the rate of dearness allowance payable to central government employees might be enhanced from 72% to 80% with effect from January 2013