How DA is Calculated

Current DA formula


Dearness Allowance = (Avg of AICPI for the past 12 months - 115.76)*100/115.76

The Average of the past 12 months should be removed and only it should be last AICPI should be taken into account. The division factor of 115.76 is also not correct . The DA for entire year of 2006 was only 2% due to faulty formula.

All India Consumer Price Index

   The rates of the total 252 items are collected by the specified Post Offices mostly in rural places

Actual Prices as on 1/1/2011 

Please see CLICK HERE

 http://confederationhq.blogspot.in/2012/06/confederation-of-central-govt.html

 Compare Prices Of Government CPI Prices and Market Prices

Item	Rate
	Anushakthi nagar co-op stores	Chembur open market	Govt CPI Prices as on 1/9/12 in Karnataka
GROCERY ITEMS
Rice Old	34.00	36.00	16.00
Wheat	24.00	25.00	20.00
Tur Dal	76.00	80.00	50.00
Moong Dal	74		50.00
Udid Dal	78.00	78.00	48.00
Sugar	44.00	46.00	40.00

NON VEG ITEMS
01	Mutton	320.00	320.00	220.00
02	Fish	300.00	320.00	210.00
03	Egg – per dozen	48.00	48.00	40.00
DIARY PRODUCTS
01	Milk – Cow	32.00	36.00	30.00
02	Milk Buffalo	42.00	48.00	35.00
VEGETABLES
01	Onion	23.00	24.00	20.00
02	Potato	24.00	26.00	25.00

 The difference of prices of  food items quoted by the Rural Post Office as per Government  CPI  is much 40 % less than the Urban retail price shop,  thus the DA what we are getting is less than the actual price rise

New series of CPI—All India weights

see web site: http://mospi.nic.in/Mospi_New/upload/brochure_n_cpi18_feb11.pdf

           

Sl. No	Sub group/                 Item
		Rural	Urban	Combined (Rural+Urban)
FOOD ITEMS
01	Cereals and products	19.08	8.73	14.59
02	Pulses and products	3.25	1.87	2.65
03	Milk and milk products	8.59	6.61	7.73
04	Oils and fats	4.67	2.89	3.90
05	Egg, fish and meat	3.38	2.26	2.89
06	Vegetables	6.57	3.96	5.44

07	Fruits	1.90	1.88	1.89
08	Sugar etc	2.41	1.26	1.91
09	Condiments and spices	2.13	1.16	1.71
10	Non- alcoholic beverages	2.04	2.02	2.03
11	Prepared meals etc	2.57	3.17	2.83
12	Pan, tobacco and Intoxicants	2.73	1.35	2.13
	Food, beverages and tobacco	59.31	37.15	49.71

Sl. No	Sub group/                 Item
			Rural	Urban	Combined (Rural+Urban)
Miscellaneous ITEMS
01	Fuel and light	10.42		8.40	9.49
02	Clothing and bedding	4.60		3.34	4.05
03	Footwear	0.77		0.57	0.68
04	Housing	Nil		22.53	9.77
05	Education	2.71		4.18	3.35
06	Medical care	6.72		4.34	5.69

                                   

07	Recreation and amusement	1.00	1.99	1.43
08	Transport and communication	5.83	9.84	7.57
09	Personal care and effects	3.05	2.74	2.92
10	Household requisites	4.48	4.30	4.40
06	Miscellaneous	24.91	28.00	26.31

From the above it is quite clear there is no weightage for rural housing & Miscellaneous   weightage is much more than required. Which is effecting DA calculation.   

.a) The Prices of the articles are continuously rising.

b) The DA is announced twice in a year that is January and July respectively

c) The Index point which was at 100 on 1/1/2001

d) The Index point which was at 115.76 on 1/1/2006.

e) From 1/1/2006 to 30/7/2012 the points has risen from 115 points to 214 points there by there is an increase of 99 points compared to 74 % DA.

f) The Price of an article which was as on 115.76 on 1/1/2006 is Rs 206 as on 30/5/12 that is the market cost of today’s price is 206 and Government employee if he goes to market to buy the article has to pay an increased price of Rs 90/- and DA is just 70. that means simple calculation of 90% DA should be given to Government Employees.

g) The prices which are increased from January to July is provided DA wef from JULY. That is that the prices which are increased for example the Cost groundnut oil is Rs 70 as on 1st July 2011 shows an steady increase and is Rs 90 as on 30th June 2012 DA as on 1st July 2012 is computed as average of Rs 70 & Rs 90 that is it works out to Rs 80. There after it is divided by factor 115.6 that works out to Rs 69 hence no DA is admissible even though the prices are increased from Rs 70 to Rs 90.

h) The prices which are increased from past twelve months are not compensated only it is compensated after 6 months of increase. Hence the worker is cheated. For example if the price of an article is increased abruptly after DA is announced on July 2011 and He has to wait for compensation till JULY 2012. due to average of 12 months criteria. That is no immediate compensation of price rise is available to him. That is he has to pay from his pocket to buy the article.

i) The Variable DA should be there as in case of petrol prices as and when the international crude is increasing the oil companies raise their prices of petrol, so no burden on them, same should be the case of Government Employees as and when the AICPI increase then the DA should automatically increase every month.

j) Recommendation of 6th CPC vide para no 4.1.13

The Commission is of the view 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 basket representative of Government employees and formulate a separate index. Meanwhile, the Government may continue to use the AICPI (IW) for estimating the DA.

Hence separate DA AICPI should be formed for Government employees