This will lead to direct increment in salary of central government employees since their dearness allowance (DA) is directly dependent on the way CPI-IW is calculated.

The government calculates DA with the help of CPI-IW Index. If the government executes the new CPI-IW, it is very much likely that Dearness Allowance (DA) of central government employees will go up. 

“The government is going to prepare new Consumer Price Index for Industrial Workers. The base year may be 2016,” said a senior official of the Labour Ministry on the condition of anonymity, according to media reports. The change in base year directly affects DA of the staffers.

If the government executes the new CPI-IW, it is very much likely that Dearness Allowance (DA) of central government employees will go up.  The move is likely to benefit 48 lakh central government employees. According to a top official, new CPI-IW Index numbers may well be issued on October 21.

Currently, increment in DA had been delayed till June 2021 due to Coronavirus pandemic and central government employees are being paid DA at the previous rate of 17% interest only. This also implies that increment in salary of central government employees might take some time.

Earlier, the government had increased DA of central government employees by 4% in March. However, in April, the government decided to implement this change from June 2021 instead of April this year.