The All India Consumer Price Index- Industrial Workers (AICPI-IW) serves as the standard inflation index for calculating dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners. This index is based on prices of food, services and other essential items in the CPI basket, and the 12-month average reading of the AICPI-IW index is used to determine the biannual DA. However, the All India Defence Employees’ Federation (AIDEF), which represents a large group of defence civilian employees, is pushing for a change in the index used for calculating DA, DR and pay revision for the 8 th Pay Commission (8 th CPC).
In its second supplementary memorandum submitted to the 8 th Pay Commission, the AIDEF has proposed replacing the Consumer Price Index (CPI) with a new employee-specific cost-of-living index.
