ON WHICH BASIS DEARNESS ALLOWANCE IS CALCULATED?

siddhi2007
On which basis is dearness allowance calculated?
nanu1953
There are DA/VDA calculations for minimum wages as well as through different schemes both in the public and private sectors. In all methods, the Consumer Price Index (CPI) is a common factor, but the neutralization processes are different. In some cases, it is percentage-wise, while in others, it is per point neutralization comparing with the ups and downs of the index.

There are index months/quarters, etc., as well as payable months/quarters, etc. It is basically the time of review - monthly, quarterly, half-yearly, or yearly. There is also the base year, which may be 1960 = 100, 1982 = 100, 2000 = 100, etc. The purpose of changing the base year is basically that the consumption basket is changing with the passing years. There is also a conversion factor from one base year to another base year.

Depending on the DA/VDA scheme, you have to understand the overall concept properly.

S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions
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