Expected DA from 1.1.2016 – Confirmation of 7th CPC
7th Pay Commission has confirmed in its report that the Dearness allowance would be 125% form 1.1.2015. Assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay.
The Dearness Allowance (DA) is paid to Central Government employees to adjust the cost of living and to protect their Basic Pay from erosion in the real value on account of inflation. Presently, DA is based on the All India Consumer Price Index (Industrial Workers).
The JCM-Staff Side has suggested that the existing formula for the calculation of DA may continue.
Analysis and Recommendations
The VI CPC had recommended that the National Statistical Commission may be asked to explore the possibility of a specific survey covering government employees exclusively, so as to construct a consumption basked representative of government employees and formulate a separate index. This has, however, not been done.
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.