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AICPI-IW for Sep-12 released – Likely increase in DA from Jan 2013 is 8%

Central Government Employees, Pensioners and family Pensioners may get Dearness Allowance of 80% with effect from 1st January 2013

The price index which is called as AICPI – IW (All India Consumer price Index for industrial workers with the base as 2001=100) for the month of September 2012 has been issued by Government.

Click here to reade the press release issued by Governement for publishing AICPI-IW for the month of September 2012

This is the table All India consumer price index AICPI-IW for the period from January 2012 to September 2012

Month AICPI-IW
Jan 2012 198
Feb 2012 199
Mar 2012 201
Apr 2012 205
May 2012 206
Jun 2012 208
Jul 2012 212
Aug 2012 214
Sep 2012 215
Oct 2012 Will be released in the last week of November 2012
Nov 2012 Will be released in the last week of December 2012
Dec 2012 Will be released in the last week of January 2012

The above indices from Jan 2012 to Sept 2012, require special mention here as Calculation of expected Dearness Allowance for central government employees, Central Government Pensioners and central government family pensioners with effect from 1st January 2013 need these indices.

The expected Dearness Allowance with effect from January 2013

To calculate Dearness Allowance with effect from January 2013 we require AICPI (IW) for previous 12 months.

Dearness Allowance with effect from 1st January every year (Average of AICPI-IW for the months from January to December of previous year – 115.76)X100/115.76
Dearness Allowance with effect from 1st July every year (Average of AICPI-IW for the months from July of previous year to June of this year – 115.76)X100/115.76
115.76 is a factor which converts 1982 series AICPI (IW) (Base 1982=100), which was applicable prior to 6CPC to 2001 series AICPIW (Base 2001=100). In turn, This is arrived at by dividing the 1982 series AICPI by a linking factor which is 4.63 (536/4.63=115.76)

To estimate the Dearness Allowance that Central Government Employees and Pensioners will be getting with effect from 1st January 2013 based on AICPI-IW, we will consider following 4 Scenario

  Scenario 1 (No Inflation) Scenario 2 ( Inflation contained) Scenario 3(Same inflationary trend) Scenario 4 (More inflation)
Month AICPI-IW AICPI-IW AICPI-IW AICPI-IW
Jan 2012 198 198 198 198
Feb 2012 199 199 199 199
Mar 2012 201 201 201 201
Apr 2012 205 205 205 205
May 2012 206 206 206 206
Jun 2012 208 208 208 208
Jul 2012 212 212 212 212
Aug 2012 214 214 214 214
Sep 2012 215 215 215 215
Oct 2012 (expected) 215 210 216 217
Nov 2012 (expected) 215 210 217 219
Dec 2012 (expected) 215 210 218 221
Expected DA 80% 79% 80% 81%

Enter the above AICPI-IW for the months from September 2012 to December 2012 in the following GConnect DA Calculator to estimate DA. You can also enter your own estimated index to estimate DA.

Scenario 1:

If we assume that there is no inflation from October 2012 and the AICPI-IW remains at 215 for the months of October, November and December 2012, the expected DA for the Central Government Employees and pensioners will be 80%, which is 8% more than the present 72%

Scenario 2:

If we assume that the inflation will be contained in the coming months and consequently AICPI-IW will be 210 for months from October 2012 to December 2012. Then based on following indices from January 2012 to December 2012 we get estimated DA of 79% with effect from January 2013, which is 7% more than the present 72%

Scenario 3:

If we assume that the nominal inflationary trend to continue in the coming months and consequently AICPI – IW increases 1 point each for the months from October 2012 to December 2012. Then expected DA will be 80% with effect from 1st January 2013, which is 8% more than the present 72%

Scenario 4:

If assume that inflation is more in the coming months and consequently AICPI-IW for the months from October 2012 to December 2012 increased two points each. Then expected DA will be 81% with effect from 1st January 2013, which is 9% more than the present 72%.

we may get DA of 80% with effect from 1st January 2012 if we have same inflationary trend continues or even if we have no further inflation in the coming months:

Based on the pattern we assume the chances for likely happening of scenario 1 and 3 are more. So, we may get DA of 80% with effect from 1st January 2012. The possibility of happening of scenario 4 is very less but we can not overrule the same in this inflationary trend. In that case we may get an additional DA of 9% with effect from 1st January 2013.

To get more details for calculating Dearness Allowance – Check this DA calculator Page

Please note that these are only estimations and the exact DA will be known only after government releases the consumer price indices for the months from October to December this year.

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