Understanding Minimum Wage: Why Do Basic and DA Vary Across States?

Friends,

Looking at the Minimum Wage Lists for various states, I find that in some employment, Basic is higher than DA, and in others, DA is higher than Basic. Can someone tell me the criteria for fixing Basic and DA in the Minimum Wage rate for states.

Regards,
Shijit.

Dear Shijit,

It may happen even in the central government where, by an increase of DA, which reaches 150% of basic, then after the pay commission, DA is merged with basic and things move on. Like that, minimum wages and VDA are decided by the state government. After a specific period, a wage board is constituted by the state government to revise the wages. After the report of the wage board, the state government decides the minimum wages, even deciding how much basic and how much DA.

Regards,
J. S. Malik

Dear Readers,

Basically, DA/VDA concept is very old. In the public sector, most employers nowadays do not pay DA or VDA. However, this practice prevails in organizations that are unionized. The rates are revised twice a year, depending on the Price Index Number. Some organizations calculate based on the state level, while others use the central index.

As far as employees are concerned, they should always prefer the central level index.

Thank you.