EXPECTED DEARNESS ALLOWANCE FROM JULY - 2010

The installment of Dearness Allowance (DA)for the second half of this year is awaited with lots of expectations.

The reasons are many…

An employee has to wait for one full year to get his annual increment which is only 3% of his Basic Pay and for a promotion, the benefit is only the Grade Pay difference + 3% Increment of his Basic Pay. The Dearness Allowance (DA) is more than that because of the increases in prices of all commodities.

Dearness Allowance is an essential component of salary. It is based on monthly All India Consumer Price Index for Industrial Workers (Base year 2001-100) announced by the Labour Bureau – Government of India from time to time. After 6th CPC, the Government directed that the Dearness Allowance may be calculated based on AICPIN with the base year 2001-100.

As of now, the situation demands increase in Dearness Allowance (DA) from Jul-2010 to Dec-2010 should be 45% and it will be confirmed only when the All India Consumer Price Index (AICPIN) for May and June is published. But when the index value 170 decreases to 165 or low for the next two months, the Dearness Allowance (DA) will be 8%. If it increases from 170 to 173 and above, there is a chance that the Dearness Allowance (DA) shoots up to 10%. Till now, we can conclude that additional Dearness Allowance (DA) will be 10% because there is no relief in the prices of essential commodities. The recent hike in prices of Petrol/Diesel/Kerosene/LPG has added fuel to the fire and the AICPIN (All India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100) will obviously touch a new high.

In the next year, when DA will cross 50%, all allowances will get a hike up to 25% as per the 6th CPC recommendations. This will bring some relief to the employees.

We have to wait for this announcement for almost two months.