June AI-CPI-IW rose by 0.5 points DA from July 2021 expected to be 31%

The Labour Bureau, Ministry of Labour and Employment, Government of India has published the AI CPI-IW for May 2021. The figure now stands at 120.6, an increase of 0.5 points from the previous month's figure. On one-month percentage change, it increased by 0.42 per cent from the previous month compared to an increase of 0.30 per cent recorded between corresponding months a year ago. The increase observed in the index is mainly due to items from the Food & Beverages group

The CPI-IW indices till June 2021 will be used for the calculation of the Dearness Allowance from July 2021. With figures from only one more month i.e. June required for this, it can be said that the calculated Dearness Allowance from July 2021 will be 31%. It has to be noted that the

government has frozen the DA at 17% till June 2021. However, the sources indicate that it only the administrative delay for hiking the DA. The minutes of the  48th meeting of National Council JCM to be held on 26/ 06/2021 says that the Cabinet Secretary had stated that the Department of Expenditure would process the matter for getting the Cabinet Approval for restoring the frozen DA / DR from 1/7/2021. Hence it can be assumed that the DA from July 2021 will be hiked from the expected 28% by 3% to 31%. 

The AI CPI-IW for June 2021 will be released at the end of July 2021. After this, the Union Cabinet is required to approve the DA/DR hike to the Central Government Employees and Pensioner.  Based on this the Finance Ministry will issue the office memorandum for the DA hike. The entire process is likely to take two-three months. The order can be expected by August or September.