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# Increase in DA of 7% approved by Union Cabinet

The hike in DA of 7% with effect from 1st July 2012, which we have been estimating since last month has been justified as Central Government has hiked the Dearness Allowance of Central Government Employees, Pensioners and Family Pensioners by 7% with effect from 1st July 2012.

How to calculate DA from AICPI (IW)?

To calculate Dearness Allowance 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)

Calculation of DA with effect from 1st July 2012:

So we have all the data for calculating Dearness Allowanance with effect from 1st July 2012 now.

 Month AIl Indian Consumer Price Index (AICPI-IW) July 2011 193 Aug 2011 194 Sep 2011 197 Oct 2011 198 Nov 2011 199 Dec 2011 197 Jan 2012 198 Feb 2012 199 Mar 2012 201 Apr 2012 205 May 2012 206 Jun 2012 208

Average of AICPI (IW) for the period from July-2011 to June-2012:

 (193+194+197+198+199+197+198+199+201+205+206+208)/12 = 199.58 DA with effect from 1st July 2012 = (199.58-115.76)X100/115.76) = 72.41 Rounded to 72

You can also estimate DA using GConnect DA Calculator (Click here to go to GConnect DA Calculating Tool)

This increase in DA would benefit around 80 lakh employees and pensioners. It is also estimated that the increase in DA would cost an additional amount of Rs.7408 crore annually to the exchequer.

Further, this increase in Dearness Allowance is based on approved formuula as per recommendations of sixth pay commission and its acceptance by the Government.