What is Industrial DA?

Posted on 10th Jul 2018 | 1307 views

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Industrial DA or IDA (Industrial dearness allowance) is a type of allowance given to the public and government sector employees and also pensioners. DA is not a compulsory allowance in case of private sector employees i.e, private sector companies are not forced to give DA. IDA is modified frequently because of the inflation rate on a quarterly basis. To decrease the burden of inflation (a rapid increase of price index), the government has come up with different allowance plans and extra benefits for the employee so that he/she can cope with the situation. The rapid rise in CPI (Consumer Price Index) is the main factor for frequent change in IDA. IDA is modified quarterly by taking the average of previous 3 months AICPI ( All India Consumer Price Index).

IDA from October 2017

IDA from October 2017:

IDA from October 2017 is modified in the recent circular issued by that the government of India declaring an increase of 5.3% of IDA giving a total of 124.3% IDA w.e.f October 2017. Before October 2017, IDA is at 119%.
In order to calculate the IDA, AICPI for past 3 months along with Base index is required.
For the year 2017, the AICPI index for the months of June, July and August are respectively at 280, 285, 285 with an average of 283.33 and AICPI for average on 01 Jan 2017 is 277.33 with an increase of 6 points. Base index with effect from 2007 is 126.33 for public sector employees whereas for employees from central government base index is 115.76
The formula for calculating is IDA or for central government and public sector employees is given below:
IDA formula

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