Increase in DA from January 2015 estimated to be 6% or 5%
Increase in DA from January 2015 estimated to be 6% or 5% – DA for Central Government Employees and Pensioners from January 2015 will be 113% or 112%
All India Consumer price Index for Industrial workers AICPIW (IW) for October 2014 has been released by Labour Bureau recently (Click here for details). This inflation indicator is remaining at 253 for third month.
On the basis of indices from January 2014 to October we have attempted here to estimate Central Government Employees and Pensioners DA from January 2015.
| Month | Actual AICPI-IW |
|---|---|
| Jan 2014 | 237 |
| Feb-2014 | 238 |
| Mar-2014 | 239 |
| Apr-2014 | 242 |
| May-2014 | 244 |
| Jun-2014 | 246 |
| Jul-2014 | 252 |
| Aug-2014 | 253 |
| Sep-2014 | 253 |
| Oct-2014 | 253 |
| Nov-2014 | yet to be released |
| Dec- 2014 | yet to be released |
While the first part of year 2014 had some inflationary pressure, later part of it had no such signs. If at all there is any increase in DA for CG Employees from January 2015, it is due to AICPI (IW) in the first part of the year i.e from January to June this year. In fact his inflation indicator was totally flat from August 2014. This trend may continue in the coming months also due to factors such as cut in fuel prices and good monsoon etc.
Esimation of DA from January 2015 :
We have anlaysed following three scenarios in this estimation.
Scenario 1. No change in AICPIW in coming months
Given that AICPI (IW) remains at the same level of 253 in November and December, increase in DA for Central Government Employees and Pensioners will be 6%. In fact, even for increase in AICPI (IW) for December up to 262, while it remains at 253 in November, increase in DA will be 6%.
DA from Jan 2015
| ((237+238+240+242+244+246+252+253+253+253+253+253 to 262)/12) -115.76) *100 / 115.76 |
| =113 |
Scenario 2. Lesser Indices in November and December
We have predicted the optimum fall in AICPI (IW) in this scenario, which reduces the DA rate to 112%. If AICPI (IW) falls to 251 and then to 250 in Nov and Dec respectively, then increase in DA will be only 5%.
DA from Jan 2015
| ((237+238+240+242+244+246+252+253+253+253+251+250)/12) -115.76) *100 / 115.76 |
| =112 |
Scenario 3. Increase in AICPI (IW)
To get 7% increase in DA, AIPCI (IW) has to increase to 257 for November and then to 259 for December 2014.
DA from Jan 2015
| ((237+238+240+242+244+246+252+253+253+253+257+259)/12) -115.76) *100 / 115.76 |
| =114 |
Analysis:
Scenario 3 involves, increase in the index from 253 to 257 in one month which may not be possible in the current trend. So, getting 7% DA Increase from January 2015 is unlikely.
Chances of Scenario 1 coming to reality is more, considering the easing out of Inflationary pressure. So, Central Government Employees and Pensioners may get 6% increase in DA from January 2015.
At the same time, Scenario 2 has also got fair chances, if the downward trend in AICPI (IW) that we witnessed in the previous year happens again (AICPI was 243 in November 2013 and it came down to 237 in Jan 2014). In that case, DA from January 2015 will be 112%
Conclusion:
On the basis of above analysis it is estimated that increase in DA of Central Government Employees from January 2015 will be either 6% or 5%.
How to calculate DA for Central Government Employees and Pensioners ? – Check this link
Readers can make use of following GConnect DA Calculator to verify the above analysis:
GConnect DA Calculator:
Disclaimer/ Note: It may please be noted that this is only a prediction on the basis of available data and arithmetical calculation. Actual DA rate from January 2015 will be known after Government issues orders for the same.