You must understand the basic concept of dearness allowance. It is a payment towards the rise in cost of living, which is calculated based on cost of living index.
As regards the minimum wages, the State government or the central Government makes a notification and payment is to be made.. With regard to payment at a higher level, the company can formulate its own scheme for payment of dearness allowance. It can be a fixed percentage of the basic pay, or on a sliding percentage, as per company's scheme and policy.
Please remember, once the company is paying more than the minimum wages, it can formulate its own scheme for payment of dearness allowance. Needless to say that all other factors like, region cum industry, capacity to pay etc are taken in to consideration by the company .
There is a difference of government and public sector undertaking paying DA and private or limited company paying Da.
DA(DEARNESS ALLOWANCE ) is the allowance paid to employees due to rise in Market price .
Generally DA is calculated as rise in consumer price index .And DA is connected with basic generally it is the %of basic pay.
SUPPOSE WE TAKE A BASE CPI AS 2460
CURRENT CPI IS 3460THEN RISE =1000
THEN RISE 1000/2460*100 = 40.65%
Then DA will be 40.65% of Basic.
Hope this helps,
15th September 2011 From India, Raipur