The DA is calculated and revised every quarter using CPI (IW) data as detailed below:
The data for the period from April to June is used to calculate the DA for bank employees for the period from August to October. Let us understand the same with data for the period from April 2020 to June 2020 which is used to find out Bank employees Dearness allowance for the period from August 2020 to October 2020.
The Consumer Price Index (Industrial Workers), Base 2001 = 100, data published by Labour Bureau for April 2020, May 2020 & June 2020 is 329, 330 & 332 respectively.
The DA for bank employees is calculated based on CPI of 1960 and hence the CPI(IW) Base2001=100 is converted into CPI(IW) Base= 1960 by using conversion factors 4.63 & 4.93. In simple words, the latest CPI(IW) data is multiplied by 4.63 & 4.93. Further, the average CPI of 3 months is calculated.
| Month | CPI(IW) | Month | CPI(IW) |
| July 2019 | 319 | January 2020 | 330 |
| August 2019 | 320 | February 2020 | 328 |
| September 2019 | 322 | March 2020 | 326 |
| October 2019 | 325 | April 2020 | 329 |
| November 2019 | 328 | May 2020 | 330 |
| December 2019 | 330 | June 2020 | 332 |
| CPI(IW) Base 2001=100 (A) | CPI(IW) Base 1960=100 (A)*4.63*4.93 | |
| April 2020 | 329 | 7590.72 |
| May 2020 | 330 | 7532.55 |
| June 2020 | 332 | 7578.20 |
| Average CPI | 7540.16 |
4440 slabs, merged in basic pay in terms of as above as per 10th bipartite settlement, are deducted from Average CPI to find out CPI number for which DA is payable. For the period from August 2020 to October 2020, the same comes out to be 3100.16 (i.e. 7540.16-4440)
To convert the same into slabs the CPI no is divided by 4 i.e. 3100.16/4 = 775 slabs (ignoring decimals)
In terms of 10th BPS, the Dearness allowance is paid @0.10% for 1 slab and hence the DA payable for the period is 77.50%
The DA for the previous quarter (i.e. from June 2020 to August 2020 was 76.10%, hence there is an increase of 1.40% (77.50 – 76.10)
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