This post is in response to the queries as to how the reduction of 16 slabs of Dearness Allowance(DA) for in-service employees in April 14 will affect the RBI Pensioners Dearness Relief(DR) in August 14. And whether there will be any increase of DR for Pensioners in Aug 14! The answer is pensioners may get 13-17 slabs in Aug 14 depending on the CPI numbers to be released on 31st July 14 and is explained below:
As per Pension Regulations 1990, dearness relief shall be payable ... on the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. Dearness relief shall be payable for the half year commencing from the 1st day of February and ending with 31st day of July on the quarterly average of the index figures published for the months of October, November and December of the previous year and for the half year commencing from the 1st day of August and ending with the 31sl day of January on the quarterly average of the index figures published for the months of April, May and June of the same year. The existing employees are, however, paid DA on quarterly basis.
In the month of Feb 14 Pensioners(1-11-2007 on wards) as well as existing employees were getting 666 slabs of DA @99.9% of BP on the basis of average Index (CPI 5500).
In the month of Apr 14 DA of existing employees was reduced by 16 slabs based on quarterly data for the period 1-1-14 to 31-3-14 (235,237,238 ) and the last quarterly average (CPI Index)applicable to them fell to 5432.67 in April 14. As a result, the DA was reduced to 650 slabs from 666 slabs, for the period 1st April 14 to 31st July 14. Pensioners continue to get 666 slabs till 31-7-14.
The monthly Consumer Price Index numbers (Base 2001=100) for the months of Jan 14 to June 14 released so far are as under:
| Jan-14 | Feb-14 | Mar-14 | Apr-14 | May-14 | June-14 |
| 237 | 238 | 239 | 242 | 244 |
to be announced on
31st July 14
(Assumed 246) |
Now the Index numbers for Apr-14,(242),May(244) and June-14 (Assumed 246) give quarterly average of 5569 points. Last average in respect of Pensioners was 5500/5501 in Feb 14. So they will get 68 points or 17 slabs(5569-5501).
However, in service employees are being paid DA on the Average of 5432 after reduction of 16 slabs. So, they will now get 137 (5569-5432) points or 34 slabs on the basis of above Index numbers.
In other words. the loss of 16 slabs to the employees in Apr-14 is not applicable to pensioners. The loss will cease from Aug 14.
Hence, the percentage increase of Dearness relief for RBI pensioners effective Aug -14, is estimated as per the table below:
However, in service employees are being paid DA on the Average of 5432 after reduction of 16 slabs. So, they will now get 137 (5569-5432) points or 34 slabs on the basis of above Index numbers.
In other words. the loss of 16 slabs to the employees in Apr-14 is not applicable to pensioners. The loss will cease from Aug 14.
Hence, the percentage increase of Dearness relief for RBI pensioners effective Aug -14, is estimated as per the table below:
| Pensioners retired between------->> the period | 1-11-2007 onwards | 1--11-2002 to 31-10-2007 |
1-11-1997
to
31-10-2002
|
| increase in slabs | 17 | 17 | 17 |
| % increase | 2.55 | 3.06 | 4.08 |
Actual number of slabs will be known only after the index number for the month of June-14, are released on 31st July 2014. The above information is for the purpose study only.
We hope the matter is now clear. Comments and suggestions are welcome!