DA formula revised for Central government employees

The Ministry of Labour and Employment has revised the base year for calculation of DA, from 1963-65 to 2016


Considering the inflation, the Government revises the base year off and on, for calculation of dearness allowance (DA). The formula has been changed again, with the Ministry of Labour and Employment revising the base year. This will bring about a change in the wage pattern.

The base year 1963-65 will now be replaced by a new series of wage rate index (WRI) with base year 2016. The National Statistical Commission has changed the WRI from 1963-65 to 2016, as recommended by the International Labour Organisation (ILO), to ensure more efficiency.

Meanwhile, it has been clarified that no proposal is being considered to form an 8th Pay Commission for revision of salaries of government staff.

According to Union Minister of State for Finance Pankaj Chaudhary the pay matrix may be revised based on the Aykroyd formula taking into account the price changes of the commodities essential for the common public. These changes are monitored by the Labour Bureau at Shimla from time to time. He suggested revising the pay matrix periodically based on these, eliminating the need to wait for the constitution of yet another Pay Commission.

He reiterated that DA is paid to Central government employees to help them deal with inflation, and the DA rate is revised periodically every six months based on the inflation rate as per the All India Consumer Price lndex for Industrial Workers (AlCPl-lW), announced by the Labour Bureau.

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