Here is a method to calculate the Dearness Allowance

Dearness Allowance = (Avg of AICPI for the past 12 months – 115.76)*100/115.76

For example if you want to calculate DA with effect from 1.1.2006, get the average of AICPI for
the period from 1.1.2005 to 31.12.2005, which is 115.76 and apply the same in as follows DA
with effect from 1.1.2006 = (115.76-115.76)*100/115.76 = 0% DA w.e.f 1.07.2006 = (118.95-
115.76)*100/115.76 = 2%

Like wise DA with effect from 1.1.2007, 1.7.2007, 1.1.2008, 1.7.2008, 1.1.2009, and 1.7.2009
were calculated as 6%, 9%, 12%, 16%, 22%, and 27% respectively.