DA from January 2019 will not be less than 12% – Estimation

DA from January 2019 – All India Consumer Price Index for both July 2018 and August 2018 recorded at 301.  Now that it is almost confirmed that DA from January 2019 can not be less than 12% (3% increase from July 2018)

CPI for the month of July 2018 witnessed unprecedented 10 point increase – Highest monthly increase in CPI index (Base 2001=100) witnessed earlier was 7 points in the month of July 2009

DA from January 2019Govt has released All India Consumer Price Index (Industrial workers) for the Month of August 2018 now. It could be seen that there is no increase in CPI  in the month of August 2018.

All India Consumer Price Index for the month of August 2018

However, due to phenomenal increase in Consumer Price Index to the extent of 10 points in July 2018, still there are lot of chances for DA for Central Government Employees reaching 12% and above with effect from January 2019.

Historical data reveals that out of consumer price index for the period from 2005 to June 2018, highest monthly increase in the index was recorded in the month of July 2009 which was 7 Points.

Consumer price Index from the year 2005

Consumer price index

We have attempted to estimate the DA from January 2019 for Central Government Employees and Pensioners based on assumed Consumer Price Index for the months from August 2018 to December 2018.

Estimation : DA from January 2019 will not be less than 12% (3% increase in DA with effect from January 2019)

Actual Consumer Price Index from January 2018 to July 2018 is as follows.

Month Actual AICPI-IW
Jan-2018 288
Feb-2018 288
Mar-2018 287
Apr-2018 288
May-2018 289
Jun-2018 291
Jul-2018 301
Aug-2018 301
Sep-2018 To be released
Oct-2018 To be released
Nov-2018 To be released
Dec-2018 To be released

If we assume that there is no change in Consumer Price Index for the period from September 2018 to December 2018 , then DA from January 2019 is estimated as follows.

DA with effect from 1st January 2019 = [ (288+288+287+288+289+291+301+301+301+301+301+301)/12]-(261.4)X100/261.4
= 12 % (increase of 3% from the DA of 9% w.e.f July 2018)

 

If we assume a moderate increase of 1 point in Consumer Price Index for the period from September 2018 to December 2018 in each of these months, then DA from January 2019 will be 13%, which is 4% higher than the current level.

DA with effect from 1st January 2019 = [ (288+288+287+288+289+291+301+301+302+303+304+305)/12]-(261.4)X100/261.4
= 13 % (increase of 4% from the DA of 9% w.e.f July 2018)

 

It could also be seen that DA from January 2019 may not be less than 12% (3% increase in DA) even if Consumer Price Index decreases by 2 points during the months from September 2018 and December 2018

DA with effect from 1st January 2019 = [ (288+288+287+288+289+291+301+301+299+297+295+293)/12]-(261.4)X100/261.4
= 12 % (increase of 4% from the DA of 9% w.e.f July 2018)

 

The following DA Calculator will be handy to check the above DA Calculation.

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