Dear Mr. Ramesan,
If you think that VDA and CPI can be explained in one or two paragraphs then I am sorry to say that you have hugely mistaken. Your question may very simple but trust me the answer is really very difficult to explain. Even if I explain you would not be able to understand as VDA is a huge and complicated area. I can guarantee that not many HR people across India and I mean India, has an indepth knowledge of VDA. I doubt whether anyone in this forum would be able to make you understand the entire nuances of VDA calculation So my suggestion would be that you find some person in your area who is an industrial and labour law expert and who deals with such matters in his own company and discuss the matter with him. I think that would the ideal solution for you.

From India, New Delhi
Mr.Rao is correct in terms of the continuous leave, if the person avails leave on preceding and succeeding the paid festival or national holiday. The total leave will be calculated as 3 days leave and it will be deducted from the person's leave credit.
K. Gopalakrishnan

From India, Bangalore
Dear Awvik, Thank you for your timely intervention and making this point very clear. Also can you help me to find out any good books where I can sharpen my knowledge in this part
From India, Tiruppur
Dear Ramesan,
Thank you very much for understanding my point. Sorry to say once again that no book gives you a detailed understanding of VDA. At least I haven't seen one. You have to know it from someone who is dealing in this matter. I myself did that and that's when I realized what VDA is all about. It's a huge area and no book can explain in such details. You need to know a lot of things to understand what VDA is all about. Then only you can start thinking of calculation of VDA.

From India, New Delhi
You can develop the formula as per below guidelines.
A = S x (Xn-Xo)/Xo
A = Amount to be added in VDA in the quarter under consideration.
S = Basic
X0 = Base CPI Index (Reference index)
Xn = Revised CPI Index during the quarter under consideration.

From India, Lucknow
Dear Mr. Ponraj,
Brilliant!!!! I never knew that calculation of VDA was soooooo easy. Now can you please tell me that if my basic is 3000, Xn = 1000 and Xo = 1020 then what would be the amount that would be added to my existing VDA?
Eagerly waiting for your reply.

From India, New Delhi
Thanks for your (sarcastic) reply. I am not aware of how the VDA is being revised on every quarter. But the guideline formula what I gave was being used to calculate the Escalation amount of contract price for price variation of inputs.

From India, Lucknow
Mr Ponraj,
Please understand that VDA is not an easy subject. Please don't post such things which you are not confident about and which may lead to further confusion. Let people know the hard way. Otherwise it may lead to serious problem in future to the new generation of HR professionals.
By the way,sorry for the sarcasm.

From India, New Delhi
I agree.
It is quite a detailed subject.
Moreover, it is complicated by the fact that there are systems (salary & wages administration policy) with 100 % neutralization of DA and some, where it is not so.
In addition to it, DA for Govt. employees is administered in a different way; whereas it is different for, say PSUs which are in manufacturing/industrial sector; which is based on the All India Consumer Price Index Number for Industrial Workers.
Right Awvik ??

From India, Delhi
Dear My seniors, I have posted this query.. what should I understand from this discussion. or cam any one help me to find out a good book on this subject?? Please advise
From India, Tiruppur

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