National Council JCM Staff Side suggested on the issue of Dearness
Allowance in 7th Pay Commission, the existing formula of computation of
Dearness allowance and its payment with effect from 1st January, and
1st July may continue…
Dearness allowance
The neutralisation envisaged under the present system of computation of
dearness compensation is supposed to be cent per cent, but in reality it
is not the case. Actual consumer price index is much higher than the
level at which DA is calculated on the basis of 12 monthly average. The
average is always lower than the actual cost of living.
The calculation of consumer price index, its basis, the basket of goods
on which it is based, are questionable and has become a matter of
dispute. Since the Pay Commission being not the forum at which these
issues could be taken, we do not propose to go into the details of this
aspects.
We suggest, therefore, that the existing formula of computation of DA
and its payment with effect from 1st January, and 1st July, may
continue.
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