Dearness allowance from Jan 2013, will be declared only after the Finance Minister arrival..!

   It is really surprising that, even after the month prescribed by 6CPC to announce the Dearness Allowance passed, the central government yet to decide the rate of dearness allowance to be paid to central government employees from January 2013. Almost all the central government employees news websites have written more than enough about the rate and timing of announcing the Dearness allowance payable to central government employees with effect from 1st January 2013.

   On 2nd April 2013, Some Established News websites informed that the 8% dearness allowance likely to be approved by cabinet committee today ie on April 02, 2013. But at the end of the cabinet meeting it had been informed that decision on hiking dearness allowance deferred as the Finance Minister was not present. At that time the Finance Minister P Chidambaram was on an official visit to Japan. According to this claim, it is now very much clear that if FM is not present in the Cabinet committee meeting , the fate of DA will not be decided.

   Now according to the PIB release dated 13-4-2013 , The Union Finance Minister Shri P. Chidambaram left for one week two nation tour to Canada and USA on Sunday,14th April, 2013. The Finance Minister will leave for the back home on 20th April, 2013 and will arrive in the national capital on the early morning of 22nd April, 2013.

   Now it can be claimed that the decision on Dearness Allowance will be declared only after the Finance Minister’s arrival. So the central government employees may have to wait for one more week to get the result on  8% hike in dearness allowance from January 2013.

Source-www.gservants.com

Expected dearness allowance from July 2013.

Let us hope the DA for January 2013 will be announced very shortly..

and move on to Expected dearness allowance from July 2013

   It is really unfortunate that at the time of discussing about the rate of dearness allowance from July 2013, expectation on dearness allowance from January 2013 is not fulfilled even now. Actually the additional amount, that the central government employees may get, on account of hike in dearness allowance from January 2013 apart from their regular pay is not at all a matter for the people those who are dealing with lakhs and crores. But it is indeed a matter for 50 lakh central government employees and pensioners, In order to deal with abnormal price rise; they have no other option than expecting dearness allowance to be increased. It is expected that the central government has reached the saturation point and it has no other go than to announce it as soon as possible. Let us hope it will be announced very shortly.

   At this juncture it is very hard to move on to the topic of dearness allowance from July 2013. But there is a saying.. “Sometimes It is very hard to move on, once you move on, you will realize it was the best decision you ever made” . So Let us move on to the topic of expected dearness allowance from July 2013.

   As we all know that the Average AICPIN for Industrial Workers starting from the month of July 2012 to June 2013 determines the rate of dearness allowance to increased from 1st July 2013.

   Let us see the All India consumer price Index numbers published by Labour Bureau website till date from July 2012.

Month	AICPIN-IW
July 2012	212
August 2012	214
September 2012	215
October 2012	217
November 2012	218
December 2012	219
January 2013	221
February 2013	223
March 2013	to be published
April 2013	to be published
May 2013	to be published
June 2013	to be published

   The AICPIN for the last four months are yet to be published. According to the 8 months average of AICPIN , if the same trend continues up to June 2013, the dearness allowance to be increased from 1st July 2013 will be around 9% to 10%. So it is estimated from the above AICPIN position that expected increase in dearness allowance will be around 9% to 10%

Source: www.gservants.com

Announcement of DA from January 2013: Speculation of reasons for delay.

   After implementation of recommendations of Sixth Pay Commission the Govt. has accepted the calculation of standard formula for calculation of future DA and in para 4.1.19 Sixth Pay commission has recommended that DA may continue to be sanctioned twice a year as on 1st January and 1st July payable with the salary of March and September.  After 6th CPC implementation order of DA from January of respective years was issued/declared as follows:-

15/3/2007- 6% – Thursday
07/3/2008 -6% – Monday
26/2/2009- 6% – Thursday
19/3/2010 –8% – Friday
22/3/2011- 6% – Tuesday
23/3/2012 -7% – Friday

   DA from January, 2013 is yet to be announced.  No any reason for delay is stated from any reliable sources and no exact reason can be constitute for it.  Now everyone to speculate the reason for delay in announcement.  The following main facts are presented to inspect the reasons:

1. Merger of DA with Basic Pay:  This is the first reason is everyone’s mind.

   Positive points are for this reason:-
   (a).  Unexpected delay in announcement -  Traditionally DA for January should be announced in the Month of March.  There is no complicated formula for calculation of expected DA.  Only formal announcement was to made by Govt.
 
   (b).  2014 General Election – Next General Election is in near future.  All are expecting that Govt. may consider about merger of DA in view of the inflation and vote bank.

   (c).  Union Minister Ajay Maken’s letter to PM about inflation -  This letter showing that some part of Govt. is also in favour of enhancement of pay and allowances of Central Government Employees.

   (d).  Employee Unions are pressing hard for merger of DA.

   (e).  In press clip for expectation of announcement of DA on 2th April mostly news article added that confederation has demanded the merger of DA and in practice govt. merged the DA when it reach 50% cap.

   Negative points of this reason:-

   (a) 6th CPC has not recommended for merger of DA.  In Para 4.1.18 of recommendation of 6th CPC :

   4.1.18 ……This conversion, however, is not necessary in the revised structure being recommended where increments are payable as a percentage of the pay in the pay band and grade pay thereon and provision has been made for all allowances/benefits to be revised periodically linked to the increase in the price index. The Commission is, therefore, not recommending merger of dearness allowance with basic pay at any stage.

   (b)  Recently Govt. already denied any possibility of merger of DA.

2.  Delay in announcement due to administrative reasons:-

  Finance Minister, who is the main authority to approve the DA was on tour in past.  In practice decision of approval of enhancement in DA can be taken in Cabinet Meeting [meeting of Economic Affairs].  On the constitution of meeting of economic affairs on 2nd affairs the media had expected on 1st April that enhancement in DA will be approved by Govt.  But in absence of Finance Minister the meeting which was chaired by PM deferred the hike in DA including other major decision related to Finance Ministry.

   The next meeting of Cabinet Committee of Economic Affairs was also placed on 4th April but there was no any indication about approval of DA, however govt.  decontrolled the lavy on sugar.

   The decision on hike in DA by CCEA is based on some calculation about impact of enhancement of DA in govt. budget.  The administrative reason for delay may be insufficient calculation or any mis-calculation of impact of enhancement of DA.

   In the conclusion even after the seventh day of the month of April, the enhancement in DA from January, 2013 is yet to be declared by the Government.  On Tuesday or Thursday [traditionally the meeting day of cabinet] decision may be taken by Govt.  This time if formal announcement not made by Govt. and any written approval was got by authority to hike in DA, we expect the direct formal order from Department of Expenditure.  All knows the announcement of DA hike can be delayed but not denied.

Source: www.karnmk.blogspot.in

Dearness Allowance from January 2013 - 6th CPC Recommendations on merger of 50% Dearness Allowance.

   "No any recommendation in 6th CPC Report on merger of 50% Dearness allowance with basic pay at any stage"...

   Dearness Allowance from January 2013 – 6th CPC Recommendation

   As of now nobody knows the correct reason why the government is delaying the approval of DA hike from January 2013. Actually the delay in announcing the dearness allowance helps the people speculate more about the Governments Plan about whether the 50% DA will be merged or not.

   As per the 6th CPC recommendation accepted by the government, the Dearness Allowance supposed to be enhanced from 1st January of every year has to be paid with salary of month of March. The 6th CPC was very much clear about two things; first one is the formula for calculating the quantum of DA to be paid to central government employees and its frequency. Second one is on Merger of 50% Dearness allowance with Basic pay by converting it as dearness Pay.

   Sixth Pay Commission recommendation on Merger of 50% Dearness Allowance and sanctioning of DA to central government employees.

   It has been clearly told in 6th CPC recommendations under the Heading of Dearness Allowance, Chapter no 4.1…

   4.1.18 ……This conversion, however, is not necessary in the revised structure being recommended where increments are payable as a percentage of the pay in the pay band and grade pay thereon and provision has been made for all allowances/benefits to be revised periodically linked to the increase in the price index. The Commission is, therefore, not recommending merger of dearness allowance with basic pay at any stage.

   4.1.19 No real justification exists for revising DA once in 3 months. Accordingly, DA may continue to be sanctioned twice a year as on 1st January and 1st July payable with the salary of March and September respectively for administrative convenience with inflation neutralization being maintained at 100% at all levels.

   As it was the recommendation of 6th CPC , even after the seventh day of the month of April, the quantum of DA to be increased is yet to be declared by the government is quite new for central government employees. But it is evident that ‘announcement of DA hike can be delayed, but Payment of increased Dearness Allowance cannot be denied’.

Source:www.gservants.com

Decision on hiking dearness allowance deferred.

   Decision on hiking dearness allowance deferred

   The government on Tuesday deferred a decision on hiking dearness allowance (DA) of central government employees to 80 per cent, from 72 per cent at present.

   An increase in DA would have benefitted about 50 lakh employees and 30 lakh pensioners.

   "The proposal on DA has been deferred as the Finance Minister was not present," Information and Broadcasting Minister Manish Tewari told reporters after the Cabinet meeting chaired by Prime Minister Manmohan Singh here.

   Finance Minister P Chidambaram is on an official visit to Japan.

   A hike in DA has been proposed with effect from January 1, 2013, according to sources.

   The government had hiked DA to 72 per cent in September last year. The increase was with effect from July 1, 2012.

   The Confederation of Central Government Employees has demanded merger of up to 50 per cent DA with the basic pay and setting up the seventh pay commission at the earliest.

   As per the practice, the DA is merged with basic pay when it breaches the 50 per cent cap. This helps employees get higher allowances as those are paid as proportion to the basic pay.

Source:economictimes

Expected DA from July-2013, AICPIN for the month of February-2013. Consumer Price Index Numbers for Industrial Workers (CPI-IW) February 2013.

   According to a press release issued today by the Labour Bureau, Ministry of Labour & Employment the All-India CPI-IW for February, 2013 rose by 2 points and pegged at 223 (two hundred and twentythree). On 1-month percentage change, it increased by 0.90 per cent between January and February compared with 0.51 per cent between the same two months a year ago.

   The largest upward contribution to the change in current index came from Food group which increased by 1.28 per cent, contributing 1.40 percentage points to the total change. This was followed by Miscellaneous and Fuel & Light groups with 0.62 and 0.80 per cent increase respectively contributing 0.27 and 0.11 percentage points to the change. At item level, largest upward pressure came from Rice, Wheat & Wheat Atta, Fish Fresh, Goat Meat, Poultry (Chicken), Milk, Onion, Tea (Readymade), Electricity Charges, Rail Fare, Petrol, etc. However, this was compensated by Root Vegetables and Sugar, putting downward pressure on the index.

   The year-on-year inflation measured by monthly CPI-IW stood at 12.06 per cent for February, 2013 as compared to 11.62 per cent for the previous month and 7.57 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 14.98 per cent against 14.08 per cent of the previous month and 5.08 per cent during the corresponding month of the previous year.

    At centre level, Belgaum and Munger-Jamalpur centres recorded the largest increase of 7 points each followed by Vijaywada, Tiruchirapally and Jharia (6 points each). Among others, 5 points rise was registered in 5 centres, 4 points in 6 centre, 3 points in 9 centres, 2 points in 14 centres and 1 point in 15 centres. On the contrary, 4 points decline was reported in Coimbatore, followed by Tirpura and Guwahati (3 points each) and 1 point in 7 centres. Rest of the 14 centres’ indices remained stationary.

   The indices of 41 centres are above All-India Index and other 36 centres’ indices are below national average. The index of Haldia centre was at par with all-India index.

   The next index of CPI-IW for the month of March, 2013 will be released on Tuesday, 30 April, 2013. The same will also be available on the office website www.labourbureau.nic.in.

Expected DA from Jul-2013. AICPIN for the month of January-2013. Consumer Price Index for Industrial Workers (CPI-IW) – January, 2013.

No. 5/1/2013-CPI
GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR  BUREAU

CLEREMONT, SHIMLA-171004
DATED: the 28th February, 2013

Press Release

Consumer Price Index for Industrial Workers (CPI-IW) – January, 2013

   The All-India CPI-IW for January, 2013 rose by 2 points and pegged at 221 (two hundred and twenty one). On 1-month percentage change, it increased by 0.91 per cent between December and January compared with 0.51 per cent between the same two months a year ago.

   The largest upward contribution to the change in current index came from Housing Group which increased by 3.53 per cent, contributing 1.28 percentage points to the total change. This was followed by Miscellaneous and Food groups with 0.74 and 0.26 per cent increase respectively contributing 0.32 and 0.28 percentage points to the change. At item level, largest upward pressure came from Rice, Wheat & Wheat Atta, Groundnut Oil, Eggs (Hen), Fish Fresh, Goat Meat, Poultry (Chicken), Onion, Tea (Readymade), Firewood, Auto Rickshaw Charges, Bus Fare, Rail Fare, etc. However, this was compensated by Arhar Dal, Potato, Tomato, Other Green Vegetables, Sugar, Electricity Charges and Flower/Flower Garlands by putting downward pressure on the index.

   The year-on-year inflation measured by monthly CPI-IW stood at 11.62 per cent for January, 2013 as compated to 11.17 per cent for the previous month and 5.32 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 14.08 per cent against 13.53 per cent of the previous month and 0.49 per cent during the corresponding month of the previous year.

   At centre level, Durgapur recorded the largest increase of 18 points followed by Jharia (10 points), Godavarikhani (9 points), Goa and Surat (8 points each), and Chandigarh (6 points). Among others, 5 point rise was registered in 3 centres, 4 points in 6 centre, 3 points in 12 centres, 2 points in 13 centres and 1 point in 11 centres. On the contrary, Labac-Silchar and Mariani-Jorhat centres reported a decline of 2 points each. The indices of Jalandhar, Rourkela, Sholapur and Kolkata were also declined by 1 point each. Rest of the 21 centres’ indices remained stationary.

   The indices of 39 centres are above All-India Index and other 38 centres’ indices are below national average. The index of Mysore centre was at par with all-India index.

   The next index of CPI-IW for the month of February, 2013 will be released on Thursday, 28 March, 2013. The same will also be available on the office website www.labourbureau.nic.in.

sd/-
(S.S. NEGI)
DIRECTOR

Source:http://www.labourbureau.nic.in/Press_Note_CPIW_E_Jan2013.pdf

The Expected Dearness Allowance with effect from January 2013

LIKELY INCREASE IN DA FROM JANUARY 2013 IS 8%

   Central Government Employees, Pensioners and family Pensioners may get Dearness Allowance of 80% with effect from 1st January 2013

   The price index which is called as AICPI – IW (All India Consumer price Index for industrial workers with the base as 2001=100) for the month of September 2012 has been issued by Government.

   This is the table All India consumer price index AICPI-IW for the period from January 2012 to September 2012

Central D.A. likely to be announced today.

   The Union Cabinet is expected to meet this evening to consider a 7 per cent hike in the Dearness Allowance (DA) of Central government employees.

   Once approved, it will benefit over 52 lakh government employees.  The meetings of the Cabinet Committee on Economic Affairs (CCEA) and Cabinet Committee on Infrastructure (CCI), scheduled for Friday, were postponed apparently in view of the rapid political developments in the aftermath of the government's decision to hike diesel prices and operationalise its earlier move to allow Foreign Direct Investment (FDI) in multi- brand retail.

Central D.A. from July 12 may be 7% again.

 

Subject to AICIN data for the next two months remaining in the current level, the following assumption is being made.

   The AICPIN data for April 12 has been recently published. It rises to 4 points and reached 205. We know that D.A. is calculated on the basis for 12 months average. To calculate the D.A. payable from 1st July 2012, we need the figures of May and June 2012 which are to be released on 30.06.12 and 31.07.12 respectively. If the data remains for the next two months in the same level, i.e. 205, the hike will be 7%. Even if it marginally drops  1 point in any of the months, the rise will be still 7% which will take the total D.A. to 72%.

   Considering the latest hike in petrol price, it is unlikely that the index may drop in the next months. So we can guess the next D.A. hike @7%, revising our previous guess work.

Coutesy:paycommissionupdate.blogspot.in

Additional DA from 1.1.2012, Cabinet likely to approve today.

   We expected the same that didn’t happen last week, but Today Cabinet may approve 7% additional Dearness allowance from 1.1.2012 for Central Government staff and pensioners.

   Normally, the decision on announcing DA to the central government employees was to take place on the 2nd week of March and September every year. But this procedure was being postponed for various reasons. Last year, the announcement of DA from July 2011 was also postponed. The decision on the additional DA from March 2012 is expected to be finalized on 22.03.2012 at the Cabinet meeting scheduled on that day. 

   As of now, an increase of 7% is expected which will raise the DA from 58% to 65%. As usual, the DA for March will be paid in April and the arrears for the other two months will be paid separately.