The DA Calculations comes to an End

The DA calculations as per 6th Central Pay Commission recommendations comes to an End

“The Dearness Allowance calculations as per the recommendations of the 6th Pay Commission comes to an end, the method prescribed by the 7th Pay Commission comes into effect from Jan 2016 !”

The 7th Central Pay Commission was appointed to evaluate the methods of calculating the salaries, incentives, benefits, pensions, retirement benefits, and Dearness Allowance of the Central Government employees and serving and retired personnel of the Indian defence forces, and suggest changes, if and when required.It has been Four months since the Central Pay Commission submitted its final report to the Centre.

The government has the rights to accept, reject, or modify the recommendations made by the Central Pay Commission. It has constituted a high-level committee to look into the various suggestions made in the report. The final decision on implementation of the 7th pay commission recommendations will be made based on the feedback from the empowered committee.

Meanwhile, the Central Government employees federations met with high-level empowered committee to discuss various issues, including Minimum Wages and Fitment Factor, and suggested the required amendments in the report.

There is likely to be a delay in publishing the notification containing the accepted recommendations by the 7th Pay Commission. Since the election Model Code of Conduct will be in place till the last week of May 2016, the Government acceptance notification is expected to be published in the first week of June. If that’s the case, there are possibilities that the revised salaries will be issued from the month of June. Also, the arrears for the past months are also likely to be released then.

Dearness Allowance is one of the most expected topics among Central Government employees. In the report, the 7th Pay Commission had given a short explanation about the Dearness Allowance.

The 6th Central Pay Commission suggested elaborate changes in the method of calculating Dearness Allowance. This time however, the 7th Central Pay Commission did not suggest any elaborate changes. It has suggested that the same process be continued.

We have presented a ready reckoner of the procedures that were followed when the 5th Central Pay Commission drew to a close and the 6th Central Pay Commission came into effect, which are very likely to be followed this time too.

The AICPIN points of only the month of January are available as of now. The AICPIN points for February will be released tomorrow. You can come up with approximate AICPIN points for the remaining four months to calculate the approximate Dearness Allowance.

As of January 1, 2016, according to the Centre, the Dearness Allowance stood at 125 percent. An order of the Ministry of Finance to this effect will be released soon. In the event that the 7th Central Pay Commission recommendations come into effect from January 1, 2016 onwards, the salaries of the Central Government employees will be revised by adding 125 percent to their basic pay. The new Dearness Allowance hike will be issued from 01.07.2016 onwards.

For example, if the basic pay of an employee, as on 01.01.2016, is Rs.12,000 (Grade Pay 2800 + 9200), his salary revisions and Dearness Allowance hikes as per the 6th and 7th Central Pay Commission recommendations, are given below.

Employee’s Pay as on 1.1.2016 as per the recommendations of 6th CPC

Basic Pay + 125% DA: 12000 + 15000 = 27000

Employee’s Pay as on 1.1.2016 as per the recommendations of 7th CPC

Basic Pay + No DA: 31000 + 0 = 31000

(No Dearness Allowance for the period between Jan to Jun 2016 and the first instalment of additional DA will be given only on 1.7.2016)


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1 thought on “The DA Calculations comes to an End”

  1. With the 6cpc DA formula and the instalment thereon coming to an end with the announcement of an instalment of an additional DA wef 01.01.16, it would have been an ideal situation if all the issues hanging over from the 6cpc were also to come to an end.

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