DA & Linking Factor – What’s expected? – DA Announcement and linking factor explored.
As you all know that DA is calculated based on AICPIN. AICPIN is
calculated based on the inflation and the cost of living in various
cities. So, what’s going to happen in 7th Pay Commission, let’s read.
In 3rd Pay Commission, the base year was used as (1960 =100).
In 4th Pay Commission, the DA was decided to pay twice a year and
also for calculating the DA value the percentage increase in the 12
monthly average of All India Consumer Price Index (base 1960). Also the
base year was (1982=100) as the base year.
In 5th Pay Commission, the DA was decided based on (1982=100) as the base year.
In 6th Pay Commission, the DA was decided based on (2001=100) as the base year.
In 7th Pay Commission, should we expect to have the base year as (2011=100)?
when the DA calculation change happened from base year 1982 to base year
as 2001, there were a steep increase in the DA percentage, this is
because the cost of living has increased multifold and also various
cities and items was also included while calculating the real DA.So, what’s been recommend in the 7th CPC Report
Keeping in mind that the present formulation of DA has worked well over
the years, and there are no demands for its alteration, the Commission
recommends continuance of the existing formula and methodology for
calculating the Dearness Allowance and also check out the gazette notification changes where the linking factor has been included as on AICPIN value as 2016.
Though in (2001=100) the linking factor was 4.63, this lead to the calculation of DA with the average index as 115.76 as per 2005. For example, (2005 , 12 Month Average Index – 536, so the linking factor as per record was 4.63).
All India and Centre-wise Linking factors between New Series
of Consumer Price Index Numbers for Industrial Workers on base 2001 =
100 and the previous series on base 1982=100 (General Index).
As you all now understand that the linking factor play a major role in
getting the DA value, but the linking factor for year 2016 .
If We assume that the linking factor of 2016 was used, then we expect to get a higher DA
percentage (assumption). This means it would be a real DA value as it
would include various cities and the current inflation and CPI.
We hope that when the results are out they would be using the linking
factor of 2016 as the gazette notification has this mentioned. Normally
the DA announcement is release in September 1st week or 2nd week and
hope this is announced shortly.
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