DA from January 2022 for Central Government Employees calculated as 34%

DA from January 2022 – Dearness allowance for Central Government Employees and Pensioners is 34% on the basis of All India Consumer Price Index for the months from January 2021 to December 2021.

From January 2016, Dearness Allowance of Central Government Employees was calculated based on consumer price index with Base 2001=100 till August 2020 as per the recommendations 7th Pay Commission Report which was accepted by Govt.

From the month of September 2020, Govt replaced CPI with base 2001=100 with new consumer price index with base 2016=100.

Checkout this info-graphics on new CPI Series and how it affects Dearness Allowance of Central Government Employees?

Checkout press release issued by Labour Ministry for introduction of Consumer Price Index using new series with base 2016=100

With the introduction of new series, a linking factor will be required to bridge old series of CPI and new consumer price index for calculating DA for Central Government Employees and pensioners.

As per Govt’s press release, linking factor for the conversion of new series index to previous series on base 2001=100 is 2.88.

This linking factor will have to be used to convert CPI (IW) announced by Government from September 2020 to determine Dearness Allowance of Central Government Employees and Pensioners. For example, Consumer Price Index with base 2016=100 for the month of January 2021 is 118.2 can be converted to CPI with base 2001=100 as 118.2 X 2..88 = 340 (rounded as 340 to the nearest whole number). Like wise, consumer price index for the months from January 2021 to December 2021 is determined as follows

Table of Consumer Price Index with the base 2001=100 calculated from CPI (IW) with Base 2016=100 for the Months from January 2021 to December – 2021

Month	CPI (IW) 2016=100 released by Govt from Sep 2020	CPI (IW) 2001=100 calculated using the linking factor of 2.88
January 2021	118.2	340
February 2021	119.0	343
March 2021	119.6	344
April 2021	120.1	346
May 2021	120.6	347
June 2021	121.7	350
July 2021	122.8	354
August 2021	123.0	354
September 2021	123.3	355
October 2021	124.9	360
November 2021	125.7	362
December 2021	125.4	361

New DA Calculator for calculating Dearness Allowance payable to Central Government Employees and Pensioners

Taking in to account, all the factors discussed above we have now come up with a new DA Calculator using which we can estimate Dearness Allowance applicable to Central Government Employees and Pensioners.

Expected DA for Central Government Employees with effect from 1st January 2022

we can estimate DA from January 2022, for which we have actual All India Consumer Price Index for 12 months in hand i.e from January 2021 to December 2021.

DA with effect from 1st January 2022	= [ (340+343+344+346+347+350+354+354+355+360+362+361)/12]-(261.4)X100/261.4
	= 34% (3% increase in DA from January 2022 added to current DA rate of 31%)

This calculation gives 34% of Dearness Allowance which means Central Government Employees and Pensioners will be given additional DA of 3% from 1st January 2022. DA order will be issued by Govt normally in the months of March or April for the 1st Installment of DA every year.