Gujarat Government's Special Allowance Cut: How Does This Affect You?

Gujarat Government Special Allowance Update

The Gujarat Government has declared a special allowance which has decreased by Rs. 7.80 per day. The present special allowance is 94.80 paise per day. This change is effective from the period when the Gujarat Government declared Rs. 87.00 per day, applicable from 01.10.2014 to 31.03.2015.

Regards,
J L Trivedi
Ahmedabad

Can you advise what will be the new rate as per the following table?

w.e.f. 01/04/14 to 30/09/14 w.e.f. 01/10/14 to 31/03/15

Basic Sp. All. Total Per Day Basic Sp. All. Total Per Day Unskilled 135.10 94.80 229.90 Unskilled Semi Skilled 136.20 94.80 231.00 Semi Skilled Skilled 141.30 94.00 235.30 Skilled

What will be the new rate for Housekeeping?

Best regards, Parimal

Attached is the notification of the Special Allowance of the Gujarat Government, effective from 01.10.2014, for your ready reference.

Can you advise what will be the new rate as per the following table:

| w.e.f. 01/04/14 to 30/09/14 | w.e.f. 01/10/14 to 31/03/15 |
|---|---|
| Basic | Sp. All. | Total Per Day | Basic | Sp. All. | Total Per Day |

For more information, you can refer to http://citehr.com#ixzz3FGr5V7Rs.

Thank you.

How can they reduce the special allowance? This is the first time I am hearing of that.

When other states are increasing salaries, we can say that salaries have decreased in the same work with the same rules without any fault. Otherwise, salaries will increase day by day. Seniors, any suggestions?

In my opinion, they will increase the minimum wage rate from 1st April 2015, which was already opposed by groups of employers in March 2014. This might be the reason for the decrease in the special allowance figures.

Regards,
Ashish

What will be the minimum wage for housekeeping labor in the state of Gujarat?

Best regards,
Parimal

There is no special rate of minimum wages for housekeeping (H K) in Gujarat state. The minimum wages applicable to your industry will be considered for H K personnel.

Regards,
J L Trivedi
Ahmedabad

Dear Mr. Trivedi, We fall into the category of an Engineering Unit that has engaged more than 50 employees. Therefore, whatever minimum wage is applicable to us, the same rate is applicable to the Housekeeping staff, as per your previous reply.

Question on Separate Minimum Wage for Housekeeping

My question is, what is the reason for having a separate minimum wage for Housekeeping in the notification?

Best regards,
Parimal

In some states (like Kerala), housekeeping has been recognized as a separate scheduled employment, and accordingly, separate minimum wages have been fixed for them. This would be more convenient where the activity of housekeeping has been outsourced. In states where no separate notification exists and for those who are on the rolls of the company itself, naturally, the wages applicable to the kind of workers in the industry shall be paid to them.

There is nothing wrong in reducing the minimum wages. The component of variable dearness allowance (the same, Special Allowance) is to adjust the wages to the cost of living. Therefore, whenever the cost of living decreases, the DA (Special Allowance) shall also decrease, and vice versa. The decision to decrease the special allowance in Gujarat should be due to a fall in the consumer prices leading to a decrease in the cost of living. Obviously, when the Cost of Price Index increases, the employers will be forced to pay more wages as with the increase in CPI, the special allowance will also increase.

Regards,
Madhu.T.K

Thank you very much for your input; it is totally value-added to my knowledge. Can you please describe how the Consumer Price Index is calculated and how it may affect the minimum wage?

Best regards,
Parimal

Understanding Cost of Living Index and Dearness Allowance

The Cost of Living Index is a statistical calculation that considers the consumer prices of various commodities. Since prices vary from place to place, different Consumer Price Indices (CPI) exist for different locations. The Dearness Allowance (DA) or Special Allowance, as part of statutory minimum wages, aims to adjust wages according to changes in consumer price indices. It is based on a certain base index (say, 100), and with every increase in the price index, the DA will be adjusted accordingly.

In some states like Kerala, the Variable Dearness Allowance is modified every month if there is a change in the CPI. However, in other states like Tamil Nadu, it is fixed for one year and determined after considering the average CPI for the entire year. This adjustment compensates for the increase in the prices of various consumer goods. Naturally, when there is a decrease in the prices of goods, as happened in Gujarat, the CPI will decrease, and as a result, the DA will also decrease.

Regards,
Madhu.T.K

Attached is the file for minimum wage calculation and other details that will be useful.

Regards,
J L Trivedi
Ahmedabad