We are all aware that the Dearness Allowance (DA) to the Central Government employees is determined on the basis of the All India Consumer Price Index (AIC PIN). We have also already explained on this (DA fixation pattern).The calculation of all India consumer price index is derived from the changing trends of the basic consumer commodities.
The purpose of Dearness Allowance is to help the Government employees to manage the price hike of the commodities.
Will there be any benefit to employees when the DA is increased according to the price increase and the increased DA amount is spent for the same quantity or quality of commodities? No it is not so.At least, there will be a chance for us to feel happy or be satisfied if a considerable part of the increase in the price goes to the producers / working class. But what actually happens is that the majority of the benefit goes to the capitalists and mediators (commission agents).
If there is sufficient control over the price of commodities and the hike due to unnatural factors is prevented, there would not be any need to increase the DA. The employees need not receive money in one hand as DA and pay through other hand towards increased cost of commodities. Maintaining the price of the commodities within the purchasing capacity of people is not only beneficial to the Government employees, It is more beneficial for the people in unorganised sector.
When the DA crosses 50% in January 2011, It is true that there is a possibility for 25% hike in some specific allowances (children education allowance,split duty allowance,washing allowance,cycle allowance,cash handling allowance,coveyance allowance etc) will give a little relief against price hike in essential consumables in our day today life.. In reality it is not going to prove beneficial in the long run whereas the 3% Annual increment and the change in Grade Pay on promotion are the real boons for the Central Government employees.
Source:central govt employees portal
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