The Union Cabinet approval for the 6% rise in the Dearness Allowance for
the Central Government employees is expected to be announced on coming
Thursday.
It is a well-known fact that every six months, the Central Government
increases the Dearness allowance for its employees during the months of
January and July. The increased amount is calculated on the price index
(CPI IW BY 2001=100) of essential commodities. Rise in the Dearness
allowance is being calculated on the basis of the changes in the prices
of the essential commodities during the periods between January and June
and the period between July and December.
But, it takes around three months since the release of the price index
for the months of June and December to arrive at the calculation for the
increase in the Dearness allowance. With the result that the increase
due from the month of July is being given only from the month of October
and the amount due from January is being given only from the month of
April.
And, because of this situation, the amount due for the left-behind
period of two months is to be settled as arrears. Practical problems
arise in the calculation of the arrears amount and also problem arises
in clarifying the doubts of the beneficiaries. Pensioners especially,
are more tensed up over this procedure.
To avoid this situation, the price index during the periods from
November to April and from May to October can be taken into account and
the increase in the Dearness allowance calculated based on the
information relevant to these periods. The amount can be disbursed from
the months of January and July as per this calculation so that there’s
no due as arrears.
We imaginatively tested this method to find out the result. It was found
out that there was no tangible change in the increase amount if
calculated on the basis of the price index obtained during the months of
April and October.
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