Calculation of DA
Dearness Allowance is calculated based on Cost of Leaving Index(Shimla points) based on cost and dearness of commodities this DA is calculated by the Labour department where every month publication at the department will be made in this regard by Govt. Twice a year it will be published by department based on that DA should be revised
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The cost of living index is calculated and published by the Labour Bureau Simla. This organisation is part of the Ministry of Labour, Government of India. Different years and different places are taken as a base for calculating the CLI. Dearness allowance for different companies/establishments depends on the terms and conditions of employment/agreement/settlement which will provide the CLI to be followed, the base point and the rate at which for every specified increase in the CLI the employer/management has to increase the dearness allowance. In the case of "workmen" covered by the Industrial Disputes Act, usually the dearness allowance is determined through negotiations and settlements. There is no specific legal requirement that a particular series of CLI should be followed by the employer. This is usually decided by mutual agreement.
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