Release of additional instalment of Dearness Allowance to Central Government employees and Dearness Relief to Pensioners due from 1.1.2016

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to Pensioners w.e.f. 01.01.2016. This represents an increase of 6 percent over the existing rate of 119 percent of the Basic Pay/Pension, to compensate for price rise.

This will benefit about 50 lakh Government employees and 58 lakh pensioners.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission (CPC). The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of Rs. 6796.50 crore per annum and Rs.7929.24 crore respectively, in the financial year 2016-17 (for a period of 14 months from January, 2016 to February, 2017).

Source: PIB News

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Expected DA ends with a 6percentage hike at 125%; Labour Bureau releases the much-awaited AICPIN stats of December

The monthly AICPIN statistics points for the month of December 2015 has been released by Labour Bureau. The index is one point decreased and ends with 269. The AICPIN points for the months of July 2015 till December 2015, has concluded with some ups and downs. The AICPIN points that started at 263, has ended on an average of 261.4 points (263, 264, 266, 269, 270, and 269).

Since all the AICPIN points required for calculating the DA for the months of July to December have been released, the additional Dearness Allowance, which will be issued from the month of January 2016, has been decided. It will be implemented only after the central cabinet gives its approval.

The final instalment of the DA, to be issued as per the recommendations of the 6th Pay Commission, will see an increase of 6 percent and end at 125%. With this, it concludes its 10-year-long journey.

Starting from January 2006, Dearness Allowance was revised 20 times based on the method recommended by the 6th Pay Commission. It began at zero on 01.01.2006, and increased, step by step, to 125 percent by 01.01.2016. In other words, there was an average increase of 6.25 % each time.

Since the final instalment of DA percent and the 2.57 Fitment Factor, recommended by the 7th Pay Commission, are closely related to each other, there is tremendous curiosity to know about it.

It is surprising that the 7th Pay Commission had very accurately predicted the rise.

Based on the recommendations of the 7th Pay Commission, the basic pay of all the Central Government employees will be calculated, with effect from 01.01.2016. There will be no dearness allowance for the six months starting from January to June 2016. The first instalment of the Dearness Allowance will be issued from July onwards.

The 7th Pay Commission has not recommended any changes in the DA calculation method. Therefore, the method implemented by the 6th Pay Commission will be used.

Based on the AICPIN points of January to June 2016, the additional DA will be calculated and will be given as the first instalment of the new DA.

It is being said that only after seeing the report submitted by the 13-member Empowered Committee constituted by the centre will the government decide on implementing the 7th Pay Commission reports.

7th Pay Commission Fixation of Pay : Initial Appointment on or after 1.1.2016

Pay Matrix Table for Central Government Employees

Pay Matrix Table for Defence Personnel

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DA from January 2016 Finalized by AICPIN for month of December 2015

LABOUR BUREAU, MINISTRY OF LABOUR & EMPLOYMENT has released the All India Consumer Price Index for Cabinet approval for DA from January 2016Industrial employees for the Month of December 2015 on 29th January 2016. The All-India CPI-IW for December, 2015 decreased by 1 point and pegged at 269. However, this month AICPIN most eagerly expected by all the central government employees. Because this is the Final month of last 12 Months AICPIN to determine the Dearness Allowance to be paid from January 2016

S.No Month AICPIN
1 January,2015 = 254
2 February,2015 = 253
3 March,2015 = 254
4 April,2015 = 256
5 May,2015 = 258
6 June,2015 = 261
7 July,2015 = 263
8 August,2015 = 264
9 September,2015 = 266
10 October,2015 = 269
11 November, 2015 = 270
12 December, 2015 = 269
AICPIN average = 261.41

As expected, the Percentage of DA from January 2016 will be raised to 125% from existing 119% with the increase of 6%

The AICPIN for the Month of December 2015 released by Labor bureau, put an end to all debates and assumptions over expected DA from January 2016. Last 12 Months AICPIN from January 2015 to December 2015 are required to calculate the rate of DA to be paid from January 2016. So now the exact rate of DA can be calculated after last 12 Months AICPIN are available.

Since the AICPIN for December 2015 came down by one point to 269 from the previous months 270 points, affected the DA rate reaching 126 %. It is expected that AICPIN for the Month of December will increase by 2 points and peg at 272 points. In that case, the average 12 months AICPIN will be 261.66. If this average applied in the formula to calculate the DA , the DA from January 2016 will be 126.04 with the increase of six percentage . Since December AICPIN decreased by 1 points the average AICPIN for the past 12 Months stands at 261.41 and this is the factor which restricted the DA rate with 5% increase.

DA = ( Avg of AICPIN for the past 12 months – 115.76)*100 /115.76

= (261.41666 -115.76)*100/115.76

=125.826%

According to the prescribed formula to calculate the percentage of DA, the exact rate of Dearness Allowance to paid from January 2016 is 125%.

The decision of enhancing the rate of DA from January 2016 will be declared after the approval Union cabinet in the first week of March 2016

Source : www.govtstaffnews.in

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Expected DA from January 2016 likely to change the Fitment Factor of 7th CPC

At the end of the Sixth CPC Regime all the Central Government servants are at the verge of receiving their last installment of Dearness Allowance in Sixth Pay Commission. Almost the DA from January 2016 will be finalized after the release of AICPIN for the month of December 2015. The eleven months AICPIN Points released from January 2015 to November 2015 by Labour Bureau suggests that there is a possibility to get 6 to 7 percent hike in DA from January 2016. But the AICPIN for the Month of December will determine the exact rate of hike in Dearness Allowance from Jan 2016.

The rate of DA, as expected by 7th Pay commission, if arrived at 125 % with 6% hike there will be no change in Fitment factor. Because the Fitment Factor 2.57 is arrived by adding the 125% DA, at the rate anticipated on 1.1.2016. If AICPIN for December 2015 necessitates changing the expected DA from 125% to the level of 126 % with hike of 7%, then there will be certainly an impact in the Fitment Factor of 7th CPC. In that case, there will be change in decimals of fitment factor

So, Expected DA from January 2016 will play vital role in determining Fitment Factor if it increases from expected level of 125% to 126%.

What will be the fitment factor if DA reaches at 126% from January 2016.

When it was anticipated that the DA will be 125 % from January 2016, The 7th Pay Commission stated in the Report that

“This fitment factor of 2.57 is being proposed to be applied uniformly for all employees. It includes a factor of 2.25 on account of DA neutralization, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. Accordingly, the actual raise/fitment being recommended is 14.29 percent”

If 126% of DA has to be taken into account for arriving Fitment factor with the recommended 14.29 % increase..

The Revised Fitment Factor will be as follows

The fitment factor after DA neutralization = 2.26

Increase of 14.29% over 2.26 = 0.32

Total (2.26+0.32) = 2.58

Read more at : http://govtstaffnews.in/

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No. 5/1/2015- CPI
GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU

`CLEREMONV, SHIMLA-171004
DATED : 30th October, 2015

Press Release

Consumer Price Index for Industrial Workers (CPI-IW) – September, 2015

The All-India CPI-IW for September, 2015 increased by 2 points and pegged at 266 (two hundred and sixty six). On 1-month percentage change, it increased by (+) 0.76 per cent between August and September, 2015 which was static between the same two months a year ago.

The maximum upward pressure to the change in current index came from Food group contributing (+) 1.78 percentage points to the total change. At item level, Arhar Dal, Masur Dal, Moong Dal, Urd Dal, Mustard Oil, Onion, Cauliflower, Green Coriander Leaves, Potato, Tea (Readymade), Sugar, Electricity Charges, Private Tuition Fee, Flower/Flower Garlands, etc. are responsible for the increase in index. However, this increase was restricted by Wheat, Fish Fresh, Poultry (Chicken), Eggs (Hen), Apple, Coconut, Tomato, Petrol, Washing Soap, etc., putting downward pressure on the index.

The year-on-year inflation measured by monthly CPI-IW stood at 5.14 per cent for September, 2015 as compared to 4.35 per cent for the previous month and 6.30 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 5.71 per cent against 3.55 per cent of the previous month and 6.46 per cent during the corresponding month of the previous year.

At centre level, Chhindwara reported the highest increase of 10 points followed by Varanasi (9 points), Pune, Tripura, Jalpaiguri and Bhilwara (6 points each). Among others, 5 points rise was observed in 5 centres, 4 points in 7 centres, 3 points in 8 centres, 2 points in 16 centres and 1.point in 19 centres. On the contrary, Goa recorded a maximum decrease of 4 points followed by Ernakulam 3 points. Among others, 2 points decrease was observed in 4 centres and 1 point in 2 centres. Rest of the 9 centres’ indices remained stationary.

The indices of 36 centres are above All India Index and other 42 centres’ indices are below national average.

The next issue of CPI-IW for the month of October, 2015 will be released on Monday, 30th November, 2015. The same will also be available on the office website www. labourbureau.gov. in.

(S. S. NEGI)
DEPUTY DIRECTOR GENERAL

Source : labour Bureau

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