The DA hike from Jan 2015 will around 6 to 7 percent

The Government has announced a hike of 7% Dearness Allowance and Dearness Relief for Central Government employees and Pensioners, with effect from July 2014.  The employees seems to be slightly disappointing as the hike on previous two occasions were 10%. It has to be understood that the DA is calculated on the basis of AICPIN points, which are based on inflation or price rise. 

It is highly unlikely that there will be a two-digit DA hike in the next two instalments (January 2015 and July 2015). Kindly keep in mind the fact that despite a 6 point increase of the AICPIN from 246 to 252 for the month of July 2014, there was hardly an impact. Even if it increases by 3 points over the next five months, the DA would increase to 9% only. Under normal conditions, the dearness allowance hike from Jan 2015 hike would only be about 6 or 7%.