DA / DR

Government of Odisha


Government of India

Press Releases on AICPI-IW :

What is DA and DR?
Dearness Allowance (DA) and Dearness Relief (DR) both are the same. Dearness allowance and Dearness relief are being granted to existing employees and retired employees respectively. 

Dearness allowance is calculated on the basis of current basic pay of Government employees and the dearness relief is calculated on the basis of basic pension of Government pensioners. 

DA/DR is normally declared twice a year for compensating the price hike of essential commodities. DA/DR is indicating a particular percentage fixed by the Central Government. 

The calculation of DA/DR is based on CPI (IW) as per the recommendations of the 7th pay commission. 

How to calculate DA?

The formula for calculating DA is given below and the method of calculation is common for 5th CPC DA, 6th CPC DA and 7th CPC DA. The linking factor is given below for calculating the percentage of DA. 
The linking factor is nothing but the average of 12 months of All India Consumer Price Index number from Jan 2015 to Dec 2015.
  • 5th CPC Fitment Linking Factor = 306.33
  • 6th CPC Fitment Linking Factor = 115.76
  • 7th CPC Fitment Linking Factor = 261.40
Percentage of Dearness Allowance = (Average of AICPIN for the past 12 months – Fitment Linking Factor) x 100 / Fitment Linking Factor
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Dearness Allowance for Central Government Employees was continued to be calculated after implementation of 7th Pay Commission based on consumer price index with Base 2001=100 till August 2020. 
From the month of September 2020, Govt replaced CPI with base 2001=100 with new consumer price index with base 2016=100.
Consumer Price Index for Industrial Workers (CPI - IW) from January, 2016 is given below. 


DA calculation w.e.f.1st July, 2019 :

Avg AICPI of past 12 months = (301+301+301+302+302+301+307+307+309+312+314+316) /12 = 306.08
DA = (Avg. AICPI - 261.4) *100  / 261.4 = 17%

After July 2019, Government Order for Dearness Allowance Rate for Central Government Employees was not issued on account of DA Freeze announced by Government till July 2021.

With the introduction of new series, a linking factor will be required to bridge old series of CPI and new consumer price index for calculating DA for Central Government Employees and pensioners.

As per Govt’s press release, the maiden index on new base for September, 2020 stands at the level of 118 and linking factor for the conversion of new series index to previous series on base 2001=100 is 2.88.

This linking factor will have to be used to convert CPI (IW) announced by Government from September 2020. For example, Consumer Price Index with base 2016=100 for the month of September 2020 is 118.1 can be converted to CPI with base 2001=100 as 118.1 X 2..88 = 340.13. Like wise, consumer price index for the subsequent months are also to be calculated.

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Previous Dearness Allowances
5th Pay                    6th Pay

2 comments:

Unknown said...

Very useful

5 May 2020 at 19:58
Sisirkanta said...

Please upload ORSP rule 1981 as well as D.A rate from ORSP rule 1981 to calculate arrear salary.

3 October 2023 at 06:58

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