Dearness Allowance Hike: Will Modi Govt increase DA rate for Central Government Employees?

Dearness Allowance Hike Latest News (August 2022): The Wholesale Price Index 9WPI) inflation touched a 30-year-high of 15.88% in May 2022.

dearness allowance hike latest news
Will there be Dearness Allowance hike?Representative image

Dearness Allowance Hike Latest News (3 August 2022): The Wholesale Price Index (WPI) inflation touched a 30-year-high of 15.88% in May 2022. It came down to 15.18% in June 2022. However, there is no plan under consideration to increase the rate of Dearness Allowance (DA) and Dearness Relief (DR) for Central Government Employees and Pensioners respectively in view of the rise in WPI. 

Responding to a query in the Rajya Sabha on whether the Government would consider increased WPI to approve DA/DR at higher rates, Union Minister of State for Finance Pankaj Chaudhary said in a written reply that there was no such proposal under consideration as the calculation of DA/DR is based on All India Consumer Price Index for Industrial Workers (AICPI) released by Labour Bureau (Shimla). 

“No, Sir. Calculation of Dearness Allowance (DA)/Dearness Relief (DR) to central Government employees/pensioners, is not based on WPI-based inflation. DA/DR to Central Government employees/pensioners is calculated on the basis of rate of inflation as per All India Consumer Price Index for Industrial Workers (AICPI-IW) released by Labour Bureau (Shimla), Ministry of Labour and Employment,” the Minister said. 

Chaudhary also said, “ As per Wholesale Price Index (WPI), inflation of 15.88% has been registered in the month of May 2-22 which is highest in the last 30 years (from April 1992). However, the aforesaid rate of inflation has reduced to 15.18% in the month of June 2022.”

ALSO READ | How interest earned on EPF contributions is taxed

WPI represents the wholesale prices of a basket of goods. It is used by several countries to measure inflation. 

The Government may have to consider DA/DR hike soon as the AICPI-IW has also increased in the last few months.

AICPI-IW June 2022 Data

The AICPI-IW for June 2022 increased by 0.2 points to 129.2. On 1-month percentage change, it increased by 0.16 per cent with respect to the previous month compared to an increase of 0.91 per cent recorded between corresponding months a year ago, according to the Ministry of Labour and Employment. The maximum upward pressure came from Food & Beverages group which contributed 0.20 percentage points to the total change.  Items responsible for the rise in the index in June 2022 included Potato, Onion, Tomato, Cabbage, Apple, Banana, Coriander, Chilly Dry,  Fish Fresh, Poultry Chicken, Vada, Idli Dosa, Cooked Meal, Cooking Gas, kerosene Oil, Electricity Domestic etc.

AICPI-IW May 2022 Data

The AICPI-IW for May 2022 had increased by 1.3 points to 129. On 1-month percentage change, it increased by 1.02 per cent with respect to the previous month compared to an increase of 0.42 per cent recorded between corresponding months a year ago,  according to a statement of the Ministry of Labour and Employment dated 20 June 2022. The maximum upward price pressure was in the Food and Beverages group contributing 0.79 percentage points to the total change. 

The items responsible for the rise in the AICPI-IW index were Tomato, Potato, Soybean Oil, Sunflower Oil, Buffalo Milk, Fish Fresh, Poultry Chicken, Cooked Meal,  Cooking Gas, kerosene Oil, Bus Fare, Allopathic Medicine, Telephone Charges etc. 

The Year-on-year inflation in May 2022 stood at 6.97% compared to 6.33% in the previous month. 

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos