Difference Between DA/ IDA/ VDA - Variable Dearness Allowance
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Pubali Started The Discussion:
Hello! Could anyone please tell me the basic difference between DA (Dearness Allowance)/IDA and VDA (Variable Dearness Allowance)?How is it calculated?
YOU SEE THE COST OF LIVING IS NOT STATIC AND CONTINUE TO INCREASE OR EVEN DECREASE DEPENDING UPON THE INFLATIONERY TRENDS IN AN ECONOMY. THE PAY STRUCTURE IS DEVISED SO ASTO TAKE INTO CONSIDERATION THE EFFECT OF SUCH INCREASE OR DECREASE IN COST OF LIVING. THE PAY IS DIVIDED INTO BASIC PAY AND DEARNESS PAY. THE BASIC PAY WILL INCREASE AS PER THE SLABES PROVIDED FOR THAT. THE DEARNESS ALLOWANCE WHETHER CALLED IDA/VDA WILL INCREASE OR DECREASE AS PER PRICE INDEX. THE PRICE INDEX MAY BE ALL INDEX PRICE INDEX FOR INDUSTRIAL WORKERS OR SUCH OTHER INDEX AS MAY BE ADOPTED FOR THE PURPOSE OF CALCULATION. IN CASE OF INDUSTRIAL WORKERS THE ALL INDIA PRICE INDEX IS NORMALLY ADOPTED. THUS WHEN THE PRICE INDEX GOES UP THE DEARNESS PORTION OF SALARY GOES UP AND VICE VERSA.

DEEPAK THUKRAL
Pubali 
Thank you deepak... could you please tell me how Variable Dearness allowance differs from Dearness Allowance??I guess both are calculated differently... Pubali
DearPubali

Variable Deaness Allowance is a part of Dearness Allowance.
Dearness Allowances generally is divided in to FDA ( Fixed Dearness Allowance ) and VDA ( Variable Dearness allowance) in private Sectors and in government organisations , the DA is directly linked to Cost of living index.

In Case of FDA & VDA present in a salary structure , it is calculated as under ( hereagain , the DA Points w.r.t to a Cost of living index base- you can get this in Chamber of commerce and other forums);

Total DA points say 100

FDA freezed for 70 Points @ Rs. x.
( This freezing of points and FDA amout will vary from one orgainisation to another depending on the no.of settlements made / no.of years the org. exists.)
VDA calculated for balance 30 points at a rate agreed/ arrived at.

Regards- Balaji
I WILL LIKE TO THROUGH SOME MORE LIGHT ON THE ASPECT BETWEEN FIXED DA AND VARIABLE D A. SUPPOSE THE PRICE INDEX FOR INDUSTRIAL WORKERS AS ON 30.09.2006 IS 1000. NOW THE INCREASE OR DECREASE IN PRICE INDEX DURING THE COMING PERIOD SHALL BE A FEW POINTS MORE OR LESS THAN 1000 IN THE NEAR FUTURE. THE PRICE INDEX IS NOT GOING TO COME DOWN SAY BELOW 600 POINTS. THIS IS VERY MUCH CERTAIN BASED ON PAST EXPERIENCE. THUS AT THE TIME OF MAKING NEGOTIATIONS WITH THE WORKERS THE MANAGEMENT MAY SAFELY AGREE THAT WORKERS WILL GET A CERTAIN SUM AS FIXED DEARNESS ALLOWANCESO AS TO NEUTRALISE COST OF LIVING UP TO 600 POINTS. THIS WILL MEAN THAT WORKERS WILL NOW GET VARIABLE DA IN ADDITION TO FIXED DA, BEYOND 600 POINTS AT THE AGREED RATE. TECHNICALLY THERE IS NO DIFFERENCE BETWEEN FIXED DA AND VARIABLE DA. BOTH ARE TAKEN INTO CONSIDERTION FOR THE PURPOSE OF CALCULATION OF RETIREMENT OR TERMINAL BENEFITS VIZ LEAVE ENCASHMENT, GRATUITY ETC

DEEPAK THUKRAL
CHANDIGARH
Pubali 
Dear Deepak and Balaji, Thankyou for explaining it so clearly...I needed this information for revision of pay structure. Regards, Pubali
gpprao 
Thanks Quiet an impressive reply Can you please tell me the DA for 31.12.1995 Scale As NDA is still paid on this Scale and DA



 
 
 
 





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