How Do I Calculate Dearness Allowance for Minimum Wages in Tamil Nadu's Private Sector?

Hello everyone, Good day! I'm working in a private Leather Tannery situated in Tamil Nadu. Kindly refer to the attached Go. (2D) No.98 Dt. 08-11-2022. It is mentioned that for the calculation of dearness allowance, the base shall be taken as 176 (base 2001=100), being the average of All India Consumer Price Index Number for the year 2010. For a further raise of one point over and above 176 points, an increase of ₹1.12 (Rupee one and twelve paise only) shall be paid per day.

I have collected some data from the website. The current base year for the CPI series is 2012. However, the base year for the CPI (Industrial Workers) series is 2016 (w.e.f Sep'2020). The link factor for the new series (2016=100) to the old series (2001=100) is 2.88. The average CPI-IW for the year 2023 is 134.73 (Refer to the attached CPI data).

How to calculate DA based on the G.O.? What is the DA amount?

Thanks!

Best regards, Shameem

Calculating Dearness Allowance (DA) Using CPI

If you do not have the CPI of base 2001=100, and the available data pertains to 2016=100 with a linking factor of 2.88, multiply the CPI of the 2016 base, i.e., 134.72, by 2.88 to get the CPI of the 2001 base. This calculation results in Rs 387.99.

Now, if the VDA is Rs 1.12 per point over 176 points, you need to find out how many points will earn DA. That is 387.99 minus 176, which equals 211.99. The DA per day will be 211.99 multiplied by 1.12, resulting in Rs 190.87 or approximately Rs 191.

Minimum Wages and VDA Revision for Tanneries

The Minimum Wages applicable to Tanneries is under revision, and the one attached by you is only a preliminary notification. When the revised VDA for all scheduled industries was released, the DA for Tanneries and leather manufacturers was not included. However, a mention was given in the GO dated 27-02-2023 that the DA will be notified along with revised minimum wages.