How to Calculate Dearness Allowance for Central Government Employees and Pensioners after implementation of 7th Pay Commission?

Now that, 7th Pay Commission recommendations will take effect from 1st Jan 2016. Though 7th Pay Commission has recommended for using the same series of Consumer Price Index (Industrial Workers) with Base 2001=100, DA Calculation formula used for 6th CPC Pay will have to be revised as DA to the extent of 125% will be merged with Basic Pay on implementation of 7th Pay Commission recommendations.

In other words, DA on 7th CPC Pay with effect from 1st January 2016 will be reset to 0%.

New DA Calculation Formula based on CPI (IW) after 7th Pay Commission implementation will be as follows.

Dearness Allowance payable with effect from 7th CPC Basic Pay = (Avg of CPI-IW for the past 12 months – Average of CPI-IW recorded in 2015)*100/(Average of CPI-IW recorded in 2015)

New DA Calculator for calculating Dearness Allowance payable on 7th CPC Basic Pay:

Taking in to account, the revised DA Calculation Formula we have now come up with a new 7th Pay Commission DA Calculator.

How to Calculate DA from 1st January 2016?

We have all the actual Consumer Price Indices from January 2015 to December 2015 based on which DA from Jauary 2016 is calculated to be 0%

DA with effect from 1st January 2016 = [261.4]-(261.4)X100/261.4


Like wise the latest DA Estimation, i.e DA from  January 2019 is as follows

DA from 1st January 2019:

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

With actual CPI for the months from January 2019 to August 2018 and estimated CPI from September  2018 to December 2018, we have to determine DA from January 2019.  A conservative estimation of keeping CPI static between August 2018 to December  2018 gives us an increase of 3% in DA from July 2018.


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 August 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)

Checkout this new DA Calculator for Dearness Allowance after implementation of 7th Pay Commission report, to verify the above calculations.