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Sunday, August 4, 2019

DA from July 2019 will be 17% – 5% increase as per Consumer Price Index – Orders yet to be issued

DA from July 2019 – All India Consumer Price Index from July 2018 and May 2019 suggests that increase in DA for Central Government Employees with effect from July 2019 will be 5%

DA increase in July 2019 will be highest ever since January 2016 viz., from the implementation of 7th Pay Commission recommendations.

Update 01-08-2019: DA from July 2019 for Central Government Employees and Pensioners will be 17%.  As per Consumer price Index for June 2019 which has increased by 2 points and previous 11 consumer price index indicates that there will be 5% increase in DA with effect from 1st July 2019 from the present level of 12%.

Update 01-07-2019: DA from July 2019 for Central Government Employees is all set to increase by 5% as Consumer price index for the month of May 2019 increased by 2 points. If this index stays at this level and witnessed any increase from here, our calculations shows the DA for Central Government Employees from the month of July 2019 will be 17%
All India Consumer Price Index  for the month of June  2019 has been released recently. With this release, CPI for 12 months from July 2018 to June 2019, which are needed to determine Dearness Allowance for Central Government Employees with effect from July 2019 is available.
Using this data, we have analysed and estimated possible DA from July 2019 for Central Government Employees including Railway Employees, Defence Personnel and Pensioners in this article.

Pattern of Consumer Price Index from July 2018:

The subject period has witnessed one Phenomenal increase in Consumer Price Index from 291 to 301 which is 10 points increase in July 2018 alone. Historical data reveals that out of consumer price index for the period from 2005 to June 2018, highest monthly increase in the index was recorded in the month of July 2009 which was 7 Points.
From August 2018 to December 2018, trend in CPI was steady as it remained in 301 in December 2018, after increased to 302 during October 2018 and November 2018.
However, Consumer Price Index for the month of January 2019, recorded considerable increase of 6 points and moved to 307. This increasing trend continued and in the month of May 2019 CPI is recorded at 314.
Consumer Price Index from July 2018 to June 2019 is as follows.
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Month Actual AICPI-IW
Jul-2018 301
Aug-2018 301
Sep-2018 301
Oct-2018 302
Nov-2018 302
Dec-2018 301
Jan-2019 307
Feb-2019 307
Mar-2019 309
Apr-2019 312
May-2019 314
Jun-2019 316
We have attempted to project consumer price index for the remaining one month and thereby estimate DA from July 2019.
Calculation of DA using the above data is as follows:
DA with effect from 1st July 2019 = [ (301+301+301+302+302+301+307+307+309+312+314+312)/12]-(261.4)X100/261.4

= 17 % (increase of 5% from the DA of 12% w.e.f Jan 2019)

DA increase mentioned above is an estimation based on All India Consumer Price Index for 12 months.  DA orders are yet to be issued by Govt.

 How much will be the increase in DA if CPI decreases from 314 in June 2019?

In that case, increase in DA from July 2019 will be 4% and all Central Government Employees including Railway Employees, Defence Personnel and Pensioners will be entitled to Dearness Allowance of 16% with effect from July 2019.
DA with effect from 1st July 2019 = [ (301+301+301+302+302+301+307+307+309+312+314+312)/12]-(261.4)X100/261.4

= 16 % (increase of 4% from the DA of 12% w.e.f Jan 2019)

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