Increase in Dearness Allowance to CG Employees is based on AICPI-IW

Increase in Dearness Allowance and Dearness Relief to Government Employees and Pensioners as per All India Consumer Price Index for Industrial Workers (AICPI-IW)

The Minister of State for Finance Shri Pankaj Chaudhary replied in Parliament on 2.8.2022 regarding the calculation of Dearness Allowance to Central Government employees in detail. The calculation of Dearness Allowance (DA) and Dearness Relief (DR) to Central Government employees and pensioners, is not based on the Wholesale Price Index (WPI) inflation rates. The calculation of DA and DR to Central Government employees and pensioners is calculated on the basis of the rate of inflation as per All India Consumer. Price Index for Industrial Workers (AICPI-IW). The full text of the Q&A is reproduced and given it below for your ready reference.

Government of India
Ministry of Finance
Department of Expenditure

Rajya Sabha
Unstarred Question No.1806
To be answered on Tuesday, 2nd August 2022
Sravana 11, 1944 (Saka)

Increase in DA/DR to Government employees/pensioners

1806:: Shri Naranbhai J. Rathwa:

Will the Minister of Finance be pleased to state:

(a) whether it is a fact that wholesale inflation has accelerated to 30-year high at 15.8 per cent with the result that Wholesale Price Index (WPI) has also zoomed and likely signals are of continued inflationary upward pressure;

b) whether in spite of rising in WPI, the increase in Dearness Allowance for Central Government employees and Dearness Relief for pensioners remained at three per cent, and if so, the reasons thereof; and

(c) whether Government would consider the increased WPI and approve DA/DR at higher rates while approving the next instalment of DA/DR to Government employees/pensioners and if not, the reasons therefor?

Answer

Minister of State in the Ministry of Finance (Shri Pankaj Chaudhary)

(a) Yes, Sir. As per Wholesale Price Index (WPI), inflation of 15.88% has been registered in the month of May, 2022 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. Details are given in Annexure-I.

(b) & (c) 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.

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• Also Check: AICPIN – All India Consumer Price Index – Calculation of Expected DA
• Also Check: AICPIN for June 2022 | Expected DA from July 2022
• Also Check: Expected DA Calculator July 2022
• Also Check: Dearness Allowance (DA) Rates Table | Current Central DA Rate 2022