New to HR? Need Help Understanding DA Calculation Using Kerala's CPI?

Hi, I am new to HR so I don't know much about the DA calculation. I think it is calculated on the basis of the Consumer Price Index. Ours is a seafood exporting company in Kerala. Can anyone help me in finding Kerala's CPI and how to calculate DA based on that?

For each scheduled employment variable, Dearness Allowance has been fixed by the government. The VDA will be a certain amount, which is calculated on every increase in the consumer price index over and above a fixed base index. It may be Rs. 24 for every increase in the CPI above 130 points, or similar. If the CPI is 167 (new series) for your district, then the VDA will be 24 X 37 (i.e., the point of increase in CPI over 130 base index), Rs. 888 per month. Different VDA is also fixed for daily rated workers. There are two indices, new series and old series. Some firms take the DA on the old series, whereas some other firms take DA on the new series of CPI. Find out the practice being followed in the seafood exporting industry and follow the practice. For DA, please refer to the Minimum Wages notification in respect of your industry and for CPI, contact the Bureau of Economics and Statistics. The Chamber of Commerce used to publish CPI of all the districts in Kerala on a monthly basis. You can contact them also.

Regards,

Madhu.T.K

DA Calculation for Educational Institutes in Mumbai

How can the DA be calculated for an educational institute in Mumbai for a faculty? Is it calculated every month, every year, or as per the changes in the Consumer Price Index?

The CPI points will be revised on a monthly basis. Do we also need to revise the salaries monthly? Please clarify.

In states like Tamil Nadu, Karnataka, etc., the system is to calculate the VDA based on the average of CPI of the preceding year. Accordingly, the VDA of each scheduled industry will be published by the Government in March every year, and that will be kept uniform for the entire year starting from April to March.

In states where the fixation is for every six months, you can follow that. Otherwise, you will have to vary the wages every month based on the CPI of the month.

Madhu.T.K

In Kerala, DA is revised every month based on changes in the consumer price index.

Madhu.T.K

It is very difficult to 'arrange to provide for a DA calculation' as per your demand because DA differs from industry to industry and from city to city. Therefore, what you have to do is to find the relevant industry and know what the rate of DA is and the index above which the DA will be available to employees. Then, find out the CPI of the city where your establishment is located and calculate the DA.

Madhu.T.K