Sir, could you let me know if there is some specific notification or circular or something that instructs us to follow this method of calculating D.A.?
The reason I'm asking is that there was this method of deducting 400 from the estimated indices of the month and then multiplying 1.95 to the result, to get the D.A. for that month. Two people (HR people in local organizations) I asked for advise about the DA calculation here are following this method (which leads to much higher D.A.). I'd been arguing with them that this method is wrong, but they have been following it for a long time and they are not willing to change it. One of them even showed me a Labour Law book that laid out this method immediately after listing the minimum wages for Shops and Establishments (albeit the pre July 2009 rates).
Thanks in advance!
When a series becomes very old, it is common that while fixing the wages and DA rate an amount will be merged to Basic salary and a new series is adapted keeping the same old series alive. There will be a linking factor to it which allows you to change the new series to old one. For example, in the CPI of Eranakulam, the linking factor is 9.92 and by multiplying it by the new index, you will get the old series corresponding to it.
The VDA calculated on both these need not be the same. However, employers who continue to follow the old series can continue with the old series provided the total sum of wages (basic+ VDA) calculated based on old series VDA is not less than the total as prescribed under the new series.