Is the VDA Rate for Shops in Kerala Still 24.90 or Has It Changed to 43.99?

Hello everyone! Could you confirm if the V.D.A. for Shops and Establishments in Kerala is still 24.90? (As per the 23-07-2009 Minimum Wages Notification). I was told it has been revised to 43.99. Is that correct? I could not see any notification to this effect.

According to my understanding, DA for December 2011 for Ernakulam will be: 197 minus 130 = 67; 67 x 24.90 = 1668.30. So DA payable = 1668.30. Is this correct?

Thanks in advance :)

VDA for Shops and Commercial Establishments in Kerala

The VDA applicable to shops and commercial establishments in Kerala remains the same, i.e., Rs 24.90 for every point of increase in the Consumer Price Index above 130 points. Therefore, your calculation of VDA is correct.

Regards,
Madhu.T.K

Thank you very much for the confirmation, Sir!  Sir, could you let me know if there is some specific notification or circular 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 professionals in local organizations) I asked for advice 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 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!

Understanding VDA Calculation: Old vs. New Series

There are two indices, one old series and the other a new series. The VDA may be calculated based on the old series or the new series. If you calculate DA on the old series, it is Rs 1.90/1.95 per point above 400 points of CPI, and the old series will always be higher. For example, the index under the old series for Ernakulam is 1835 (it may still be the old one), and DA based on that will be calculated on 1435 (1835 minus 400) multiplied by 1.95.

When a series becomes very old, it is common that while fixing the wages and DA rate, an amount will be merged into the basic salary, and a new series is adapted while keeping the same old series alive. There will be a linking factor that allows you to change the new series to the old one. For example, in the CPI of Ernakulam, 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 of these may not be the same. However, employers who continue to follow the old series can do so provided that the total sum of wages (basic + VDA) calculated based on the old series VDA is not less than the total as prescribed under the new series.

Regards,
Madhu.T.K