Deal All, I would to know the Basic/DA calculation based on consumer index. Please help me - urgent regards kanaka

I refer to your query relating to Basic / DA computation and assume that this is related to factory workers.

Basic wages are fixed by the respective State Governments and normally remains fixed for longer periods unless there is major restructuring needed (recently done in Tamilnadu)

Dearness allowance is that component of the wages which will help the wage earner to cope with the rising prices and is based on the Consumer price indices that are prevalent in that region, at the time when revision of DA is made. When dearness allowance is revised it is normally done in terms of Paise / rupees per point of CPI. Please note that there are two different types of CPIs. CPI - U for consumers and CPI - IW for industrial workers. Also, CPI is pegged to a base year which is taken as the benchmark. Each base year would reflect a specific no of CPI points. Till some time ago, CIP - IW used to take 1982 as base year but recently is has been changed to base year 2001.

For example: If the notification says that DA needs to be given @ 50 paise for every CPI more than the CPI of the base year 2000 and we are in 2006. We need to add up the CP indices of all the months of 2006, divide it by the no of months to arrive at an average CPI point level.

Now, if the CPI points for base year is 450 and the current CPI points are 550. Then the new DA would be:

550 minus 450 multiplied by .50

ie: 100*0.50 = Rs.50

Hope you understood what you wanted to.

Best regards,

Raja G

i too in need of these informations.. as u said cpi points from where we can get the points,, if a concern has to register n wants to give da & pf for the employees what things have to consider n what r all the proceedures,, whom to contact for the details.

if possible send the informations to my mail .

regards

ram

The devaluation of money can be assessed through Whole Sale Price Index, All India Cosumer Price Index etc. The difference between these two is that, price variation of all commodities are taken into account for Whole Sale Price Index.

But for AICPI there are some differences/ limitations.

1. There is a particular Consumer viz. Industrial Worker.

2. Some specified goods & services are defined, called "basket of goods".

3. Along with the price variation of commodities, its consumable quantity will also be considered.

4. All over India 78 Centres are selected to take average

Based on All India Consumer Price, Industrial DA being paid; variable in quarters commencing from January, April, July & October. I.e. for January the AICPI will be the average of previous September, October & November. Similarly for April it will be December, January & February, for July it will be March, April & May and for October it will be June, July & August respectively.

When the money devaluation is fully compensated it is called as full DA neutralisation. The formula for full DA neutralisation = (Total points - Base points)/ Base points (in percentage). The AICPI is introduced in India in 1960 and revised in 1982 & 2001. AICPI of 2001 x 4.63, we get AICPI of 1982 and AICPI of 1982 x 4.93, we get AICPI of 1960. For DA calculation AICPI of 1960 is accepted as the base.

Now in India mainly two term's wage settlements are in exist; Wage Settlements of 1.1.1997 & 1.1.2007. The base point in 1.1.1997 is 1708 & in 1.1.2007 is 2884.

I shall quote one example,i.e. calculation of AICPI for July '10. This is equalent to average of previous March, April & May; which recorded as 170, 170 & 172 (Base year 2001). Multiply with 4.63 and round, we get 787,787 & 796 (Base year 1982). Multiply with 4.93 and round, we get 3880,3880 & 3924 (Base year 1960). Find average of these 3 and round, we get 3895.

DA for 1.1.97 scale. Total points - 3895, Base points - 1708, Total - Base = 2187. % is 2187/1708 x 100 = 128.0 ( Correct to one decimal).

DA for 1.1.2007 scale. Total points - 3895, Base points - 2884, Total - Base = 1011. % is 1011/2884 x 100 = 35.1 ( Correct to one decimal).

I shall insert Excel sheet for IDA calculation w.e.f 1.10.2008. You may extent the rows further (as necessary) and just enter the 3 indexes towards the year 2001 in green colour columns. The results will appear in yellow and red is used for static informations.

With regards

ABBAS.P.S,

Secretary,

ITI Employees' Association,

ITI Limited, PALAKKAD - 678 623,

KERALA, INDIA.

+91 9447 467 667

AICPI (base 2001) can be had from the following site.

Labour Statistics Page 2

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