Transitioning from Bombay CPI to AICPI: How Do We Navigate This Change?

We are in the process of long-term settlement with our union. At present, we are following Bombay CPI, and management is considering changing it to AICPI. Please let me know how we can transition from Bombay CPI to AICPI, i.e., what is the relationship between both indexes and what should be the conversion formula in that case.

Regards,
D. S. Kuhar

As far as possible, in settlements, take the state's indices and not the national index because minimum wages are fixed by the state government and are linked to area CPI. However, if you have units or branches all over India and want to give the same DA to all employees, then the national index can also be taken. But while doing so, ensure that the national index is in no way less than the local index.

Regards,
Madhu.T.K

There is no conversion factor or formula in this regard. The only option is to consider the AICPI of the agreement/appointment date (or the monthly average of the quarter) and the AICPI of the settlement date (monthly average of the quarter of settlement). However, as stated by Madhu, it is not fair to use the All India level CPI if employees are working in a single state. Furthermore, in cases where the CPI of more than one sector (location) is available in a single state, it is advisable to use the nearest sector. Regards,