Expected
DA Calculation will play vital role in determining Fitment Factor of 7th CPC
Expected
DA from January 2016 likely to change the Fitment Factor of 7th CPC.
At
the end of the Sixth CPC Regime all the Central Government servants are at the
verge of receiving their last installment of Dearness Allowance in Sixth Pay
Commission. Almost the DA from January 2016 will be finalized after the release
of AICPIN for the month of December 2015. The eleven months AICPIN Points
released from January 2015 to November 2015 by Labour Bureau suggests that
there is a possibility to get 6 to 7 percent hike in DA from January 2016. But
the AICPIN for the Month of December will determine the exact rate of hike in
Dearness Allowance from Jan 2016.
The
rate of DA, as expected by 7th Pay commission, if arrived at 125 % with 6% hike
there will be no change in Fitment factor. Because the Fitment Factor 2.57 is
arrived by adding the 125% DA, at the rate anticipated on 1.1.2016. If AICPIN
for December 2015 necessitates changing the expected DA from 125% to the level
of 126 % with hike of 7%, then there will be certainly an impact in the Fitment
Factor of 7th CPC. In that case, there will be change in decimals of fitment
factor
So,
Expected DA from January 2016 will play vital role in determining Fitment
Factor if it increases from expected level of 125% to 126%.
What
will be the fitment factor if DA reaches at 126% from January 2016.
When
it was anticipated that the DA will be 125 % from January 2016, The 7th Pay
Commission stated in the Report that “This fitment factor of 2.57 is being
proposed to be applied uniformly for all employees. It includes a factor of
2.25 on account of DA neutralization, assuming that the rate of Dearness
Allowance would be 125 percent at the time of implementation of the new pay.
Accordingly, the actual raise/fitment being recommended is 14.29 percent”
If
126% of DA has to be taken into account for arriving Fitment factor with the
recommended 14.29 % increase.
The
Revised Fitment Factor will be as follows
The
fitment factor after DA neutralization = 2.26
Increase
of 14.29% over 2.26 = 0.32
Total
(2.26+0.32) = 2.58
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