LATEST NEWS ON DA JULY 2013-CABINET APPROVED DEARNESS ALLOWANCE FROM 1/7/2013

Release of additional installment of dearness allowance to Central Government employees and dearness relief to Pensioners, due from 1.7.2013

The Union Cabinet today approved the proposal to release an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from 01.07.2013, in cash, at the rate of 10 per cent increase over the existing rate of 80 per cent.

Hence, the Central Government employees as well as the pensioners are entitled for DA/DR at the rate of 90 per cent of the basic with effect from 01.07.2013. The increase is in accordance with the accepted formula based on the recommendations of the 6th Central Pay Commission.

The combined impact on the exchequer on account of both dearness allowance and dearness relief would be of the order of Rs. 10879.60 crore per annum and Rs. 7253.10 crore in the financial year 2013-14 ( i.e. for a period of 8 month from July, 2013 to February 2014).

Source:pib

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Government may approve 10% DA hike on Friday, to benefit 80 lakh

Ahead of the festive season, the UPA government is set to hike the dearness allowance (DA) of its employees by 10%, a move that will benefit almost 8 million people by boosting their purchasing power.

The Union cabinet will consider a proposal on the raising the allowance, which is a proportion of basic pay, at its meeting on Friday.

In what can be seen as major sop for a large section of aam aadmi, this will be the second DA hike in a financial year. More importantly, also ahead of the 2014 general elections.

The Centre’s decision will not only directly benefit 5 million employees and 3 million pensioners, but also help infuse more money into the economy.

Top government sources said the new DA rates would be applicable from July 1.

The sources further said the exact amount of DA, as a proportion of basic pay, works out to over 90% after factoring in the revised All-India Consumer Price Index for Industrial Workers (CPI-IW) for June.

According to revised data released on August 30, retail inflation for factory workers for June stood at 11.63%, higher than the provisional estimate of 11.06% for the month released on July 31.

The double-digit hike in DA would come after three years. It was last in September, 2010, that the government had announced a hike of 10%.

The DA was hiked to 80% from 72% in April 2013, effective from January 1, this year.

As per practice, the government uses CPI-IW data for past 12 months or a year to arrive at a number for the purpose of any DA hike. Thus, the retail inflation for industrial workers between July 2012 and June 2013 will be used to take a final decision.

Source:ET

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Centre to hike D.A. this month

  Ahead of the festive season, the Central government will this month announce a hike in dearness allowance (DA) to 90% from the existing 80%, benefiting nearly 50 lakh central employees and 30 lakh pensioners, according to official sources.

   According to officials privy to the developments, the DA hike will be 10% and effective from July 1, this year. The sources further said the exact amount of DA, as a proportion of basic pay, works out to over 90% after factoring in the revised All-India Consumer Price Index for Industrial Workers (CPI-IW) for June.

   According to revised data released on August 30, retail inflation for factory workers for June stood at 11.63%, higher than the provisional estimate of 11.06% for the month released on July 31.

   Sources said since the revised estimate for the month of June was available, the finance ministry would soon prepare a proposal for the purpose for seeking Union Cabinet nod.

    They further said the proposal would be moved this month.

   There would be a double-digit hike in DA after about three years.

   It was last in September, 2010, that the government had announced a hike of 10% to be given with effect from July 1, 2010.

   DA was hiked to 80% from 72% in April 2013, effective from January 1, this year.

   As per practice, the government uses CPI-IW data for past 12 months or a year to arrive at a number for the purpose of any DA hike. Thus, the retail inflation for industrial workers between July 2012 and June 2013 will be used to take a final decision.

Source : PTI

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Expected DA (Dearness Allowance) from July 2013 to central government employees.

   Since the implementation of 6CPC from 1-1-2006, the consumer price index number for industrial worker is not coming down ever but it is increasing month by month. Similarly the rate of dearness allowance paid to central government employees also increasing at the interval of every six months period. The rate of dearness allowance was at zero level on 01-01-2006. After six years from implementation of 6CPC, now the dearness allowance stands at 80% level. The average increase in the dearness allowance is at the rate of 13% per year. Actually there is nothing to rejoice over the increase of dearness allowance.

   The Dearness allowance is nothing but the reflection of consumer price index. Likewise the consumer price index is determined by increase in the prices of basket of identified essential commodities. The increase of CPI number is not good any way for either the government employees or common people. Whatever the money the central government employees are supposed to get from the dearness allowance hike will be swallowed by the essential commodities for which they have to spend every month, since the prices of all the essential commodities are increasing at the alarming rate.

   Now everyone eyes at the expected dearness allowance from July 2013. It is now 80 percent of AICPI Numbers from which the rate of DA has to be arrived has been released. The AICIN for Industrial Workers for two more months are yet to be released to confirm the exact rate of Dearness Allowance going to be approved by the central government. The average of AICPIN for IW from the month of July 2012 to June 2013 will determine the rate of dearness allowance to be paid from July 2013. So look at the Consumer price Index numbers from June 2012 given below.

MONTH	AICPIN
Jul-2012	212
Aug-2012	214
Sep-2012	215
Oct-2012	217
Nov-2012	218
Dec-2012	219
Jan-2013	221
Feb-2013	223
Mar-2013	224
Apr-2013	226
May-2013	-
Jun-2013	-

   The formula for calculating dearness allowance is:
( Avg. of AICPI for the past 12 months – 115.76)*100/115.76
   To find out the average CPI for 12 months we need remaining two months CPI numbers. Let us assume that if the remaining two months AICPI numbers stands at 226 levels, the average AICPI for 12 months is 220.0833.

   If we apply this in the formula given above the answer is = 90.120

   From this it is now very much clear that, even though if there is no change in the position of AICPI numbers for remaining two months, if it happened to continue in the same level of 226 points for remaining two months, the increase in the rate of dearness allowance will be 10% for the next six months starts from July 2013. According to this, the expected dearness allowance from July 2013 for central government employees will not be less than 90% level. So it is expected that the dearness allowance will be increased from existing 80% to 90% level from July 2013. With this 10% increase in dearness allowance, the annual increment for the year 2013 also will be granted for all the central government employees from July 2013.

Source:http://www.gservants.com/2013/06/02/expected-da-dearness-allowance-from-july-2013-to-central-government-employees/

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