DA is calculated as a percentage of Basic Salary of the person...
It is given on the bases of the Inflation rate which is calculated from CPI (Consumer Price Index) of that geographical area..
You can access the CPI of different cities of india at http://labourbureau.nic.in/cpw3tab.htm
and particularly of mumbai at http://labourbureau.nic.in/cpw3t836.htm#t838
In India, specially in the Government sector, the employees are paid at a fixed payscale which needs to be reviewed by "Pay Commission" sitting every 5 years.
Mean while, the employees would get a fixed increament as per the previous "Pay Commission's" recommendation. In this case, to adjust the net salary against the Inflation Rate of the area, the Government gives "Dearness Allawance" [%age of Basic salary] which practically is an increament in their basic salary as everything else is then calculated based on "Basic+DA". i.e. if 20% House Rent on basic is given as allowance, it will then be converted to 20% of "Basic + DA"
The act that has been passed for the purpose is given below...
THE ALL INDIA SERVICES (DEARNESS ALLOWANCE) RULES, 1972
In exercise of the powers conferred by sub-section (1) of the Section 3 of the All India Services Act, 1951 (61 of 1951), the Central Government after consultation with the Governments of the States concerned, hereby makes the following rules, namely :-
1.Short title and commencement :
These rules may be called the All-India Services (Dearness Allowances) Rules, 1972. They shall come into force on the first day of April, 1972.
In these rules, unless the context otherwise requires "a member of the Service" means a member of an All-India Service as defined in Section 2 of the All-India Services Act, 1951 (61 of 1951).
3. Regulation of dearness allowance:
Every member of the Service and every officer, whose initial pay is fixed in accordance with sub-rule (5) or sub-rule (6-A) of rule 4 of the Indian Administrative Service (Pay) Rules, 1954 or sub-rule (5) of rule 4 of the Indian Police Service (Pay) Rules, 1954 or sub-rule (6) of rule 4 of the Indian Forest Service (Pay) Rules, 1968, shall be entitled to draw dearness allowance at such rates, and subject to such conditions, as may be specified by the Central Government, from time to time, in respect of the officers of Central Civil Services, Class I.
If any question arises as to the interpretation of these rules, it shall be referred to the Central Government for decision.
(No. 1/13/70-AIS(II), dated the 18th March, 1972).
1Substituted vide Department of Personnel & A R Notification No. 22/1/74-AIS(II), dt.28thJanuary, 1975.
What is DA?
Dearness Allowance is a kind of Allowance given to worker to bear the cost of living due to inflation, so that he / she can at least live his life in "some comfort"
DA is a temperary entity of a salary, it was introduced in 50's or 60's (I don't remember date) and said to "taken back" in future when the price of general commodites will decrease, it has never taken back becuase of the rising price of general commodites year after year. :)
house rent allowance is payable only for the reason that the particular employee migrated and placed somewhere only because of his emloyment.
dearness allowance is the concept derived from socialistic pattern of our politics after independance. just to compensate for the commodity price increase and calculated according to price index actually published by the statistical department after taking into consideration of ite important commodities price. if DA is increased it is not a matter to enjoy. bcoz in the market the prices already hiked and definitely it will not bcome ur savings.
but our FM PC at any time wants it to cut or to be taken away by means ofTAX :(
Worker's DA is calculated on a monthly basis - which varies based on the index released by the Govt.
Why Vote? User validation is extremely important for good content to prosper.