The data of AICPI plays a vital role in the formation of dearness allowance. In accordance with the 7th pay commission, dearness allowance is generated on the basis of All India Consumer Price Index. The rates of dearness allowance will be finalized once the average data of six subsequent months is confirmed. It’s vital to have AICPI data for the dearness allowance for January 2025 since it will be all about the data from July to December 2024, owing to being on raised DA-this is when they will get approval of a nod.
A 4% rise in indices
Good news came for pensioners and central government employees at the commencement of 2025. The 8th Pay Commission has been sanctioned for the employees as per the government decision. At the same time, data released regarding the dearness allowance of the employees indicates an upturn of 4 percent. So the spot is now on calculations.
DA to rise from AICPI
Under the 7th Pay commission, dearness allowance is decided with the help of the All India Consumer Price Index (AICPI). Average inflation in months of six is taken into consideration. The DA is thus revised two times during the year. The data of July to December the year before shall be averaged in the first revision while dearness allowance would be decided in the basis of an average of the second half of data from the previous year’s January to June. It means the new DA of January 2025 tabs data received from July to December 2024.
It’s data until November
It has been learned that data up until November from the AICPI is now out. The November data is similar to the October one; however, the rate of inflation increased by around 0.49. Therefore, an increment of 3 percent is confirmed, leaving December’s figures left to ponder upon. If inflation grows by another 1 percent in December data, as soon as it is out for examination, the increase in DA will reach 57 percent with an increase of 4 percent. The figure for the All India Consumer Price Index for October’24 and Nov’24 was 144.5.
Effect of increase on salary and pension
One single percent in DA hike gets a raise added up, the raise based on the basic salary. Presently, 53 percent of DA is calculated on the minimum basic salary of an RS. 18,000. Thus, the increment amounts to Rs 9,540.
- Basic salary= Rs.18,000
- 53 percent DA= Rs.9,540
- 57 percent DA= Rs.10,260
- Increase benefit per month= Rs.720
- Annual Increase= Rs.8,640
OR
- Basic Pay=Rs.50,000
- 53 percent DA=Rs.26,500
- 57 percent DA=Rs.28,500
- Increase benefit per month= Rs.2,000
- Annual Increase=Rs.24,000
Announcement will be made in March
Regarding the increase in dearness allowance, it is conventionally announced every March and October. By all means, this time another announcement will come in March wherein money will get credited as an arrear each month starting from January.