pratheepa
Here is a PPT on the calculation of Dearness Allowance using Consumer price index.. Hope this will be useful to u ppl..
 utf-8''MEASURING CPI.ppt (427.5 KB, 1534 views)

balaram
4

hi, I have not understood. can you please explain me in detail about the complete process.
From India, Visakhapatnam
abbasiti
517

Considering the living cost and all, Wage Revision is being done once in five years or ten years. But inflation will go up day by day and subsequently the money value will come down. To compensate this we have to wait till the next Wage Revision, which is not practical. That is why the DA is introduced.

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 the All India Consumer Price Index is based on a particular cosumer viz. Industial Worker and that even, on some specified commodiies & services called "Basket of goods".

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.

The monthly statics of AICPI can be had from the following site.

Labour Statistics Page 2

With regards

ABBAS.P.S,

Secretary,

ITI Employees' Association,

ITI Limited, PALAKKAD - 678 623,

KERALA, INDIA.

+91 9447 467 667

From India, Bangalore
 DA update.xls (21.5 KB, 326 views)

sarvottam-swamy
Can your kindselves hep to calculate CPI index of Karnataka as on 01.04.2003 with 1960=100 Please show the working
From India, Bengaluru
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