What will be the Dearness Allowance with effect from July 2016
Government has issued All India Consumer price index for the month of March 2016. On the basis of these calculations figures of DA w.e.f July 2016 has been worked out.
This month AICPIN suggests that the expected DA from July 2016 will be in the range between 5% to 6% .
As per Labour Bureau report the AICPIN for the Month of March increased one point and stood at 268.
The current Index of selected commodities indicates that there will be some fluctuation in both sides for the remaining 3 Months.
See the following AICPIN table
The Increase in First three Quarter are 5, 3 and -1 points respectively
As per the CPI Index shown in the table above there are three possibilities to calculate the first instalment of DA to be paid from July 2016 in 7th Pay Commission
Assumption -I : There is No increase or decrease in AICPIN for remaining three Months.
If that is the case, we can calculate Minimum DA to be released as per the CPI Index
The AICPIN for March 2016 is 268.
If it remains same for next three months starts from April 2016 to June 2016, the Expected DA from July 2016 will be reaching exactly at 6%
Assumption -II : Decrease in AICPIN Points
One or Two points decrease from this level of AICPIN Points for last quarter will result in bringing down the rate of DA to 5%
Assumption -II : Increase in AICPIN Points
If the increase in the AICPIN goes above 7 points in last quarter,
According to the Formula prescribed for DA calculation, the rate of DA may go upto 7%
But the current trend of Consumer Price Index indicates that the increase will not be more than three or Four points for last quarter. So there are remote chances for the rate of DA to go to 7% Level.
On the other hand, there is higher possibilities for expected DA from July 2016 to reach 6%. If so the Dearness Allowance in 7th Pay Commission will start at 6% from July 2016