Editor’s Note
The latest CPI data shows retail inflation falling to a six-year low of 2.82% in May. While this may ease household expenses, experts caution it could dampen prospects for an increase in Dearness Allowance.
According to experts, the Consumer Price Index (CPI) figures for May are not encouraging from the perspective of an increase in Dearness Allowance. However, household expenses will certainly decrease. According to the data, CPI has dropped to 2.82 percent in May, which was 3.16 percent in April. This has reached a six-year low. In February 2019, the CPI rate was 2.57 percent.
According to the National Statistics Office, the reason for the decline in CPI is the decrease in the rate of food inflation. This means prices of pulses, vegetables, fruits, grains, eggs, and household items have decreased. Harishankar Tiwari, former president of the AG Office Brotherhood, which calculates inflation, explains:
According to Tiwari, there is some good news for central government employees: there has been some improvement in the All India Consumer Price Index (AICPI) in April compared to previous months. This has sparked some hope for an increase in dearness allowance of up to 2 percent to some extent.
The central government gives dearness allowance to its employees every month. It is a percentage of the basic salary. The government gives this allowance so that the impact of rising market inflation on employees is minimized. Currently, the dearness allowance for central government employees is 55 percent.
The central government implements an increase in dearness allowance twice a year. Once in January and again in July. This increase is based on AICPI data. The government announces the increase in March and September.