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DA from January 2020 for Central Government Employees – 4% increase confirmed

4% increase in DA from January 2020, is confirmed after release of Consumer Price Index for December 2019

DA from January 2020 for Central Government Employees and Pensioners estimated to be 21% . This is 4% increase from the current level DA for Central Government Employees which is at 17% – 3 Point increase in All India Consumer Price Index from 325 to 328 and two point increase in December 2019, affirms the indication of DA from January 2020 reaching 21%.

DA from January 2020 is estimated in this article, after All India Consumer Price Index for 12 months declared already by Govt (January 2019 to December 2019).

Trend of All India Consumer Index from January 2019:

After an unprecedented increase in the month July 2018 from 291 to 301, All India Consumer Price Index (Base 2001=100) remained at the same level till December 2018. However, from January 2019, the index increased steadily and it is now at the level of 330 as on December 2019.

Month wise All India Consumer Price Index recorded from January 2019 to December 2019, is as follows.

How DA is calculated for Central Government Employees and Pensioners after implementation of 7th pay commission recommendations

 

Month Actual AICPI-IW
Jan-2019 307
Feb-2019 307
Mar-2019 309
Apr-2019 312
May-2019 314
Jun-2019 316
Jul-2019 319
Aug-2019 320
Sep-2019 322
Oct-2019 325
Nov-2019 328
Dec-2019 330

Checkout here for official All India Consumer Price Index Data

Consumer Price Index for December 2019

The above data (Actual index from January 2019 to December 2019) and assumed index for the remaining month at higher, equal and lower levels than the present consumer price index suggest following Four possibilities suggest that DA from January 2020 for Central Government Employees and pensioners will be 21% with effect from January 2020

1. 4% increase in DA from January 2020, even if the assumed index for December reduced by 11 points in each month (total decrease of 20 points)

2. 3% increase in DA from January 2020, if the index decreases by 12 points in December 2019

4. 5% increase in DA from January 2020, only if All India Consumer Price Index as on December 2019 increased to 347 at least from the present level of 328.

The above 3 possibilities are discussed in detail as follows:

1. 4 % increase in DA from January 2020:

This Scenario is confirmed as to get an increase in DA lesser than 4% from January 2020, consumer price index was decrease more than 11 points in December 2019. But it did not happen as consumer price index for December has been declared as 330.

DA with effect from 1st January 2020 = [ (307+307+309+312+314+316+319+320+322+325+328+317)/12]-(261.4)X100/261.4
= 21 % (increase of 4% w.e.f January 2020 from the present DA of 17% )

2. 3% increase in DA from January 2020:

Chances of Central Government Employees getting 3% increase in DA from January 2020 or lesser than 3%, is very remote as  the index will have to decrease by 12 points in the month of December 2019

DA with effect from 1st January 2020 = [ (307+307+309+312+314+316+319+320+322+325+328+316/12]-(261.4)X100/261.4
= 20 % (increase of 3% w.e.f January 2020 from the present DA of 17% )

3. 5% increase in DA from January 2020:

More than 4% increase in Dearness Allowance with effect from January 2020, is almost remote, since the index will have to increase to 3477 or more from the present level of 328 during November 2019. Though, Central Government Employees and Pensioners were granted 5% increase in DA with effect from July 2019, the same may not be possible this time as suggested by consumer price index data.

DA with effect from 1st January 2020 = [ (307+307+309+312+314+316+319+320+322+325+328+347)/12]-(261.4)X100/261.4
= 22 % (increase of 5 % w.e.f January 2020 from the present DA of 17% )

 

Use the following DA Calculator to verify the above calculations

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