what is dearness allowance
First of all Wikipedia defines Dearness Allowance (DA) as cost of living adjustment allowance .
Furthermore, Government Employees get DA. Also, Public Sector Employees as well as Pensioners in India, Bangladesh and get da.
Exactly, Consumer Price index is base for da calculation.
Moreover, from Second World War DA means Dearness Food Allowance.
Thus,this concept was first of all introduced by Textile Industry in India.
Generally DA hike is result of inflation.
However, it is based on location , probably it varies.
You can also read pay commission
Now, calculated as % of basic pay in respect of Employees. Likewise % of basic pension in respect of Pensioners.
Thus,it is calculated based on AICPI
For Central Government Employees
DA% =( Average of AICPI ( Base year 2001=100) for the past 12 months – 115.76/115.76)*100
Also,For Central PSU
Thus,DA% =( Average of AICPI (Base year of 2001 =100) for the past 3 months-126.33/126.33)*100
Now, Economic Times defines CPI as comprehensive measure used for estimation of price changes in a basket of Goods and services.
So, these include transportation ,food and medical care representative of consumption expenditure in an economy.
However,CPI gives an idea of inflation.
Thus,this is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
Furthermore, increase in CPI is calculated by adding together a sampling of product prices of a previous year.
Thus add together current prices of same products .
Also,divide the total of current prices by old prices, then multiply the result by 100.
again, subtract 100 to find the percentage change in CPI.
However, for AICPI you are requested to verify this site http://cyberjournalist.org.in/majithia/aicpi_2001.php
DA for 1.1.19
So, with effect from 1.1.19 DA=(288+288+287+288+301+289+291+302+301+302+301+302)/12=269.91-261.4=8.51*100=851/261.4=3.2approx equals 3%
Thus,this is the highest DA announcement to central government employees after 1.1.2016.state government DA rates are same as central government employees.
Even, For more details see the site specified above.
Now do you understand how our DA is calculated.
Also, if you have any more information you can add up in my comments.
so,Your attention is also invited to this you tube video https://www.youtube.com/watch?v=FWAozb5bBHM
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