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DA from 1st July 2016 will be 3% if DA not merged taken in to account – DA merger on 7th Pay Commission implementation was 125% against the actual DA entitlement of 125.75 as on 1st January 2016 – Staff Side JCM writes to Govt
Secretary, NCJ writes to Secretary, Ministry of Finance on computing DA from July 2016
Also Read the article on present DA entitlement : 7th Pay Commission DA from July 2016 will be 2% based on CPI from Jul 2015 to Jun 2016
Dated: September 6, 2016
Ministry of Finance,
(Government of India),
North Block, New Delhi-110 001
Sub: Future computation of Dearness Allowance and adoption base index figure to Revised Minimum Wage – Regarding
The revised pay structure, as recommended by the 7th CPC, was given effect as on 01.01.2016 as per the Government’s Notification. The Dearness Allowance, which was computed at 125% ( i.e 125.75 fraction of 0.75 being ignored), got merged with Pay as on that date. The 7th CPC has not indicated as to what base figure of AICPI(IW) the Revised Wages will relate to hereafter wards. As you are aware, the actual DA that was due as on 01.01.2016 was 125.75. It is only due to the practice of ignoring fraction; the DA was determined at 125%. No doubt, the said practice had not been impacting very much except for the postponement of the benefit by six months. It is, therefore, necessary that, Revised Wages are related to a base index figure equivalent to actual Dearness Allowance percentage of 125 that stands merged as on 01.01.2016. This is more so due to the fact that there is no possibility of the ignored fraction of 0.75 being reckoned for any computation in future.
We, therefore, request that, 12 monthly average, which stood at 261.33 as on 31.12.2015, may be taken at 260.46, which would provide the exact percentage of DA at 125. The future percentage increase in DA in other words may be computed with the base figure of 260.46. The next instalment of DA, which has become due as on 1.07.2016 if computed on the above basis of 260.46, shall work out to 3.28%. On ignoring the faction, the DA with effect from 01.07.2016 shall be 3%. We, request you to kindly take the above into account and issue orders for grant of 3% DA w.e.f. 01.07.2016.
(Shiva Gopal Mishra)
Secretary (Staff Side)
National Council (JCM)
IRTSA Memorandum on the issue of DA from July 2016
Subject: Dearness Allowance – Regarding – Carrying over of ignored fractions
Reference: Para 7 of Resolution of MOF GOI Notification No. 1-2/2016-IC Dated 25-7-2016
We have to submit as under for the kind consideration of the Committee of Secretaries on Allowances in respect of the recommendation of 7th CPC made vide Para 8.17.37 its Report about Dearness Allowance (DA):
1. The existing formula for DA is unjust and weighed heavily against the employees.
2. All India Consumer Price Index (Industrial Workers), considered for determination of DA, is defective in so far as the weightage given to various items is arbitrary and not based on present day requirements of the employees or Pensioners.
3. By changing the base year to 2016 whatever advantage that had emerge out of the 7th Pay Commission will be neutralized (for example the rise of DA as on 1-7-2016 worked out to be 7% on previous base year which would have come to Rs.490 on the old Minmum Basic Pay of Rs. 7000 but it would now be only Rs. 360 i.e. 2% of new minimum Basic Pay of Rs. 18000).
4. Most importantly, the fraction of %age rise is totally ignored while declaring the revised DA. This considerably erodes the real wage every time the DA is revised. (For example the %age rise of Price Index from 1-1-2016 works out to be 2.92 but the DA as per existing system would be only 2% thus resulting in 0.92% erosion of Pay & Pension in the very first year of 7th CPC)
This is against the Law of Averages which lays down the principle that for rounding off the fraction below half may be ignored and the fraction more than half should be rounded off to the next higher point.
In any case, the fraction ignored in previous half year should be added in the next half year (for example the Average Price Index was 125.83 at the end of December, 2016. But the fraction of 0.83 was ignored and Pay rise was given only on 125%. The balance of 0.83% should be added to 2.92 for calculation the DA from July, 2016 thus DA @ 3% instead of 2% fro 1-7-2016).
5. It is, therefore, requested as under:
a) Weight-age given to various items in the All India Consumer Price Index, may please be modified as per present day requirements.
b) Fraction which was/is ignored for the previous half yearly slab of DA (say in January,
2016) may please be added for calculating the next slab of DA (in July, 2016).