Monthly All India Consumer Price Index for Industrial Workers (Base year 2001=100), shortly known as CPI-IW has been announced by the Government for the month of June-2010 today.
As per this announcement made by Labour Bureau, Government of India, Government of India, CPI-IW has increased from 172 (for the month of May-2010) to 174 for the month of June-2010. (Base 2001=100)
CPI-IW for the month of June-2010 is significant for Central Government employees as it culminates the 6 months cycle for calculation of effective Dearness Allowance with effect from 1st July 2010.
If you want to calculate Dearness Allowance with effect from July-2010, get the average of monthly All India Consumer Price Index (IW) with the base year 2001=100 for the preceding 12 months and apply the same in the following formula
Dearness Allowance = (Avg of AICPI for the past 12 months – 115.76)*100/115.76
You don’t need to break your head much in this arithmetic as we have an online tool to calculate the DA, given the index for the preceding 12 months.
Based on this calculation the Dearness Allowance eligibility with effect from 1st July 2010 works out to 45% i.e., an increase of 10% from the present DA of 35% with effect from 1st Jan 2010.
Please note that this is only attempt to estimate Dearness Allowance w.e.f July-2010 using the method adopted by Government for calculation of DA in the past. DA with effect from 1st July 2010 is yet to be announced by the Government.