High expectations on DA from Jan 2014
Expected DA from January 2014
The rate of Dearness Allowance payable to central Government Employees is arrived from a prescribed formula. In which the main component is the Average AICPIN for Industrial Workers for twelve months prior to every January and July of every year. So it is quite obvious that everyone wants to know the Consumer Price Index Numbers for Industrial Workers of every month. So they can calculate the rate of Dearness Allowance approximately after every six months.Expected DA from January 2014.
The AICPIN for Industrial workers for the month of July has been released by Labour Bureau to day. As this is the seventh month’s AICPIN , we need still five months AICPIN to calculate the rate of Dearness Allowance to be paid to central Government Employees from January 2014. But with these 7 months CPI points, the expected DA from January 2014 can be arrived approximately.
If we look at the increase rate of the AICPIN for the 12 months starting from January 2012 to December 2012, the AICPIN for the month of January 2012 was 198 and for the month of December 2012 was 219. The total increase for the year was 21 points.
For the next twelve months starting from July 2012 to June 2013, the AICPIN for July 2012 was 212 and June 2013 was 231 and the total increase was 19 points.
So we can expect that for these twelve months from January 2013 to December 2013 the increase will be more than 20 points. It should be noticed that the AICPIN is increased by 4 points for the month of July 2013. This trend is expected to be continued as the Rupee is falling against Dollar consistently. It will have a considerable impact on the prices of basket of essential commodities and Consumer Price Index too. The month of January has been started with 221 points, and this July 2013 touched 235 points level. Up to this month the total increase is 14 points. As this is the seventh month of these twelve months, the remaining 5 months will have a increase of 10 to 15 points level. So the total increase for this year will be of 24 to 29 points. According to this summary the Average AICPIN for these twelve months will be from 233 points to 234 points.
Taking all the above factors into consideration, if we apply this in the formula prescribed for calculating the rate of Dearness Allowance, the answer is as follows:
The Expected DA from January 2014 will be at 100% to 102% level.