Consumer Price Index

We are in the process of Long term settlement with our union. At present we are following Bombay CPI and management is thinking of changing the same to AICPI. Please let me know how we can change from Bombay CPI to AICPI i.e. what is the relationship between both the 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 is fixed by the state govt. and is linked to area CPI. However, if you have units or branches all over India and if you want to give same DA to all the employees, then national index can also be taken. But while doing so, ensure that the national index is no way less than local index. Regards, Madhu.T.K

There is no conversion factor/formula in this regard. Only option is to consider the AICPI of agreement / appointment date (or monthly average of the quarter) and AICPI of settlement date (monthly average of the quarter of settlement). But as stated by Madhu, it is not fair to take All India level CPI if employees are working in a single state. Further, in case CPI of more than one sector (location) is available in a single state, then it is good to take the nearest sector. Regards,