DA from January 2019 – 3% increase confirmed based on calculations – Orders yet to be issued

DA from January 2019 – Increase in Dearness Allowance for Central Government Employees with effect from January 2019 is estimated at 3% on the basis of actual Consumer Price Index for 11 months and projected CPI for 1 month

After All India Consumer Price Index  witnessed higher ever increase in July 2018 to the extent of 10 points, increase in Dearness Allowance for Central Government Employees and Pensioners from January 2019 was estimated to be not less than 3%.

Now, after release of CPI for the months from August 2018 to November 2018, we have updated this DA Estimation.

DA from January 2019Govt has released All India Consumer Price Index (Industrial workers) for the Month of October 2018 now. It could be seen that there is 1 point increase in CPI.

All India Consumer Price Index for November 2018 – No increase

Due to phenomenal increase in Consumer Price Index from 291 to 301 which is 10 points increase in July 2018 alone, there were chances for DA for Central Government Employees reaching 13% with effect from January 2019, with an increase of 4% in DA from the first half yearly 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.

However, Consumer price index from the months of August to November 2018 did increase merely 1 point and stood at 302 as of November 2018.  Hence, it is almost confirmed that Dearness Allowance for Central Government Employees and Pensioners for the month from January 2019 will be 12%.

 

Estimation : DA from January 2019 will be12% (3% increase in DA with effect from January 2019)

Actual Consumer Price Index from January 2018 to November 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 301
Oct-2018 302
Nov-2018 302
Dec-2018 To be released

If we assume that there is no change in Consumer Price Index in 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+302+302+302)/12]-(261.4)X100/261.4
= 12 % (increase of 3% from the DA of 9% w.e.f July 2018)

 

If we assume an increase of 6 point in Consumer Price Index for the period in December 2018, then DA from January 2019 will be 13%, which is 4% higher than the current level.  This is not a likely scenario considering the static nature of Consumer Price Index for the past 4 months.

DA with effect from 1st January 2019 = [ (288+288+287+288+289+291+301+301+301+302+302+308)/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 less than 12% (2% increase in DA) if Consumer Price Index decreased to 276 points which is 26 points decrease from the current level during the months in December 2018.

DA with effect from 1st January 2019 = [ (288+288+287+288+289+291+301+301+301+302+302+276)/12]-(261.4)X100/261.4
= 11 % (increase of 2% from the DA of 9% w.e.f July 2018)

 

As CPI decreasing to 276 in December 2018 is not at all possible we can very well conclude that DA from January 2019 will be 12% which is 3% increase from the current DA Level

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

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