Projected DA From August 2014

Projected Dearness Allowance of Bank Staff 

vis-à-vis Central Government Staff 

from 01-08-2014 to 31-10-2014

For Bank Staff, the anticipated D.A. for the period form 01-08-2014 to 31-10-2014 is 102.15%, basing on the assumption that the existing rate of inflation of 6.70% will continue to be the same for April, May and June, 2014.

For Central Government Employees, (with the same assumption as stated above), the projected D.A. for 6 months from 01-07-2014 to 31-12-2014 is 107%.  Thus the difference in D.A. is 4.85%, with bank staff getting less.  (It is likely that D.A. of bank staff will rise further from November, 2014 and the difference may come down).

If the rate of inflation is 8% for April, May and June, 2014, then the revised D.A. from Aug. to Oct. 2014 for bank staff will be 104.70%.   For Central Government staff (with the assumption of 8% y-o-y inflation for April, May and June, 2014), the D.A. for the 6 month period from July to Dec. 2014 is 107%.  In this scenario, bank staff's D.A. will be lower by 2.30%. (It is likely that D.A. of bank staff will rise further from November, 2014 and the difference may come down).

From these, I understand two things.

1.    When the rate of inflation is showing increasing trend during the past 3 months, the difference in D.A. between bank staff and central government staff narrows.  Bank staff do lose, but not much.

2.    When the rate of inflation is showing decreasing trend during the past 3 months, the difference in D.A. between bank staff and central government staff widens further.  Bank staff lose pretty much.

Date: 04-05-2014                                                                                                            pannvalan