The Labour Bureau, Ministry of Labour & Employment, Government of India have released the All India CPI-IW index for the month of August 2014. The index rose by two points and stood at 237. On 1-month percentage change, it increased by 0.85 per cent between June and July compared with 0.94 per cent between the same two months a year ago.
With this we have 8 of the 12 indices required for the DA calculation, we can expect that the dearness allowance will be hiked by 10% from January 2014. We can expect CPI inflation to come down over the next few months due to lower food prices because of better farm output helped by good monsoon and lower increases in minimum support prices (MSP), deceleration in rural wages and slower growth in domestic demand. However since it is election time, the government will restrain from taking an stric economic measures. The 10% hike is assumed considering that there will be an increase of two points in the 4 months to come.
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