What will be the New DA Rate with effect from 1st January 2012 ?

Labour Bureau, Government of India has announced the All India Consumer Price Index for Industrial workers (AICPI (IW)) for the month of December 2011 as 197. In the previous month (November-2011), AICPI (IW) was 199.

A summary of All India Consumer Price Index for Industrial workers for the months from January 2011 to December 2011 is given below.

Month

Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11

Sep 11

Oct 11 Nov 11 Dec 11

AICPI

188

185

185

186

187

189 193 194

197

198

199

197

We know that to estimate Dearness Allowance Rate applicable for central government employees, All India Consumer Price Index for Industrial workers (AICPI (IW)) for the previous 12 months are required. So, based on the AICPI (IW) for the months from Jan-2011 to Dec-2011 we can easily estimate the expected dearness allowance for the Central Government employees with effect from 1.1.2012 using the following formula.

Dearness Allowance = (Avg of AICPI for the past 12 months – 115.76)*100/115.76

In the recent past, many were guessing the applicable DA rate with effect from 1.1.2012, using AICPI (IW) for the months from Jan-2011 to Nov-2011 only as the same for Dec 2011 was not announced. Since, the AICPI (IW) for December 2011 is also out last week, there is no need for any wild guess regarding the DA Rate for central government employees from 1.1.2012 any more.

For the ease of GConnect users we have come up with an online tool for estimating the Dearness Allowance from time to time by using the above formula. Using this online tool you can easily calculate DA rate with effect from 1st January 2012 by entering the AICPI (IW) for the month of December 2011 which is 197, in the relevant field.

Go to GConnect Dearness Allowance (DA) Calculating Tool

Thus, the applicable DA rate with effect from 1.1.12 is estimated to be 65%, which an increase of 7% from the existing DA rate of 58%.

The official announcement by the Government for eligible DA rate for central government employees with effect from 1.1.2012 can be expected in the month of March-2012.

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