DA From January 2020 For Central Government Employees – 4% Increase Estimated

| December 11, 2019

However, 3% increase in DA from January 2020, is almost confirmed as the index will have to decrease by 10 points in November 2019 and also in December to get less than 3% increase in DA.

DA from January 2020 for Central Government Employees and Pensioners estimated to be 21% (4% increase) if All India Consumer Price Index decreases by not more than 1 point in any of the remaining two months and not more than 2 in the other.









DA from January 2020 – Even as January 2020 is getting closer, Central Government Employees and Pensioners are entitled to an additional installment of dearness allowance.

DA from January 2020 is estimated in this article, after All India Consumer Price Index for 10 months declared already by Govt (January 2019 to October 2019). We have assumed AICPI for remaining two months (November 2019 and December 2019)

Trend of All India Consumer Index from January 2019:





After an unprecedented increase in the month July 2018 from 291 to 301, All India Consumer Price Index (Base 2001=100) remained at the same level till December 2018. However, from January 2019, the index increased steadily and it is now at the level of 325 as on October 2019.

Month wise All India Consumer Price Index recorded from January 2019 to October 2019, is as follows.

 

Month Actual AICPI-IW
Jan-2019 307
Feb-2019 307
Mar-2019 309
Apr-2019 312
May-2019 314
Jun-2019 316
Jul-2019 319
Aug-2019 320
Sep-2019 322
Oct-2019 325
Nov-2019 Not released
Dec-2019 Not released

The above data (Actual index from January 2019 to October 2019) and assumed index for remaining two months at higher, equal and lower levels than the present consumer price index suggest following Four possibilities.

1. 3% increase in DA from January 2020, even if the assumed index for remaining two months reduced by 10 points in each month (total decrease of 20 points)

2. 4% increase in DA from January 2020, if the index stays at the present level (325) till Decembe 2019 i.e., No increase or decrease in the Index in the remaining two months.

3. 4% increase in DA from January 2020, if the index decreases by not more than 1 point in any of the remaining two months and not more than 2 points in the other month.

4. 5% increase in DA from January 2020, only if All India Consumer Price Index as on December 2019 increased to 340 at least from the present level of 325, with an intermediate increase of 12 points during November 2019.

The above 4 possibilities are discussed in detail as follows:




1. 3% increase in DA from January 2020:

This Scenario is almost confirmed as to get an increase in DA lesser than 2% from January 2020, consumer price index should decrease more than 12 points in the each of the remaining two months. Hence, it is estimated that increase in Dearness Allowance for Central Government Employees with effect from 1st January 2020, will be not lesser than 3%.

DA with effect from 1st January 2020 = [ (307+307+309+312+314+316+319+320+322+325+313+301)/12]-(261.4)X100/261.4
= 20 % (increase of 3% w.e.f January 2020 from the present DA of 17% )

2. 4% increase in DA from January 2020:

Chances of Central Government Employees getting 4% increase in DA from January 2020, is very bright when the index remains at the same level or decreases by not more than 1 point in any of the remaining two months and not more than 2 points in the other month. This assumption coming to reality is quite possible as the consumer price index did not decrease not even by 1 point in the year 2019. In fact, it has increased from 307 to 325 during the period from January 2019 to October 2019. Hence, considering the inflationary trend in the consumer price index, 4% increase is estimated.

DA with effect from 1st January 2020 = [ (307+307+309+312+314+316+319+320+322+325+323+322)/12]-(261.4)X100/261.4
= 21 % (increase of 4% w.e.f January 2020 from the present DA of 17% )

3.  5% increase in DA from January 2020:

More than 4% increase in Dearness Allowance with effect from January 2020, is almost remote, since the index will have to increase to 340 or more from the present level of 325, with an intermediate increase of 12 points during November 2019. Though, Central Government Employees and Pensioners were granted 5% increase in DA with effect from July 2019, the same may not be possible this time as suggested by consumer price index data.

DA with effect from 1st January 2020 = [ (307+307+309+312+314+316+319+320+322+325+337+340)/12]-(261.4)X100/261.4
= 22 % (increase of 5 % w.e.f January 2020 from the present DA of 17% )

 

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