There are three main factors which determine the increase in percentage of DA in every pay Commission.
1.DA CALCULATION FORMULA
2.AICPIN FOR INDUSTRIAL WORKERS
3. BASE AVERAGE INDEX
1. FORMULA FOR DA CALCULATION
EXPECTED D.A - 1
THE CONSUMER PRICE INDEX FOR INDUSTRIAL
WORKERS (CPI-IW) IS AN IMPORTANT STATISTICAL/ECONOMIC INDICATOR. IT WAS
FIRST INTRODUCED ON SCIENTIFIC LINES WITH BASE 1960=100 WHICH WAS BASED
ON THE RESULTS OF FAMILY LIVING SURVEY CONDUCTED IN 1958-59 AT 50
INDUSTRIALLY IMPORTANT CENTRES. THE SERIES WAS THEN, UPDATED ON BASE
1982=100 AND A REVISION IN 1999-2000 HAS FURTHER UPDATED THE BASE ON
2001=100. THE CURRENT SERIES OF CPI-IW WITH BASE YEAR 2001=100 COVERS 78
INDUSTRIALLY IMPORTANT CENTERS SPREAD ACROSS THE COUNTRY
3. Base Average Index
AFTER NEUTRALIZATION OF DA TO REVISE THE PAY
AND ALLOWANCE IN EVERY PAY COMMISSION, THE BASE AVERAGE INDEX WILL BE
MODIFIED TAKING INTO THE ACCOUNT OF 12 MONTHS AICPIN POINTS OF PREVIOUS
YEAR TO NEUTRALIZATION OF DA.
FOR 7TH PAY COMMISSION WHAT WILL BE THE BASE INDEX…?
AS THE 7TH PAY COMMISSION RECOMMENDATIONS
WILL BE IMPLEMENTED WITH EFFECT FROM 1.1.2016, THE AICPIN AVERAGE OF
2005 WILL BE THE BASE INDEX FOR CALCULATION OF DA FOR 7TH PAY COMMISSION
SO FORMULA FOR CALCULATION OF DA IN 7TH PAY COMMISSION IS
expected da-2
= [(263+264+266+269+270+269+269+267+268+271+275+277)/12]-(261.4) X 100/261.4 = 2.91 %
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