hi friends can someone guide me on the general principles of dearness allowances as applicable in india in different industry segments. regards sahelie mukherjee
From India, Calcutta
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From India, Calcutta
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Hi there. Normally, Dearness Allowance (DA) is paid as a compensation factor only in government organizations or very big organizations facing industrial relations problems. It mostly depends on the inflation rate in the particular area or industrial sector. It is regularly published by the Labour Bureau, Government of India, and can be accessed at http://labourbureau.nic.in/indnum.htm. The publication provides a clear division for workers in different sectors and geographical locations. Further documentation would help in understanding it better. DEARNESS ALLOWANCE - A PERSPECTIVE. Hope this information helps you. Ajmal Mirza :)
From India, Ahmadabad
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35From India, Ahmadabad
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Hi there,
Normally, DA is paid as a compensation factor only in government organizations or very big organizations facing IR problems. It mostly depends on the inflation rate in the particular area or industrial sector, i.e., you need to multiply the basic pay by the inflation rate percentage to calculate the DA to be paid. When the DA is merged with the basic pay, the calculation of the next DA should be done from the date of merging. For example, if Basic + DA = 10000 + 1000 is merged to equal 11000, then the next DA at 5% would be 11000 + 550 = 11550. The rates are regularly published by the Labour Bureau, Government of India, and can be accessed at http://labourbureau.nic.in/indnum.htm. It has clear divisions for workers in different sectors and geographical locations. Further documentation would be helpful to better understand it.
DEARNESS ALLOWANCE - A PERSPECTIVE
Hope this information helps you.
Ajmal Mirza
mirza_ajmal@yahoo.com
From India, Ahmadabad
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Normally, DA is paid as a compensation factor only in government organizations or very big organizations facing IR problems. It mostly depends on the inflation rate in the particular area or industrial sector, i.e., you need to multiply the basic pay by the inflation rate percentage to calculate the DA to be paid. When the DA is merged with the basic pay, the calculation of the next DA should be done from the date of merging. For example, if Basic + DA = 10000 + 1000 is merged to equal 11000, then the next DA at 5% would be 11000 + 550 = 11550. The rates are regularly published by the Labour Bureau, Government of India, and can be accessed at http://labourbureau.nic.in/indnum.htm. It has clear divisions for workers in different sectors and geographical locations. Further documentation would be helpful to better understand it.
DEARNESS ALLOWANCE - A PERSPECTIVE
Hope this information helps you.
Ajmal Mirza
mirza_ajmal@yahoo.com
From India, Ahmadabad
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Considering the living cost and all, Wage Revision is being done once every five or ten years. However, inflation will continue to rise day by day, causing the value of money to decrease. To compensate for this, we would have to wait until the next Wage Revision, which is not practical. That is why the DA is introduced.
The devaluation of money can be assessed through the Wholesale Price Index, All India Consumer Price Index, etc. The key difference between these two is that the Wholesale Price Index takes into account the price variation of all commodities.
However, for the All India Consumer Price Index, there are some differences and limitations:
1. It focuses on a specific consumer, namely the Industrial Worker.
2. It defines a "basket of goods," comprising specified goods and services.
3. It considers both the price variation of commodities and their consumable quantity.
4. It selects 78 centers across India to calculate the average.
Based on the All India Consumer Price Index, Industrial DA is paid, varying in quarters starting from January, April, July, and October. For instance, the AICPI for January is the average of the previous September, October, and November. Similarly, for April, it is December, January, and February; for July, it is March, April, and May; and for October, it is June, July, and August.
When the devaluation of money is fully compensated, it is referred to as full DA neutralization. The formula for full DA neutralization is (Total points - Base points) / Base points (in percentage). The AICPI was introduced in India in 1960 and revised in 1982 and 2001. By multiplying the AICPI of 2001 by 4.63, we get the AICPI of 1982, and by multiplying the AICPI of 1982 by 4.93, we get the AICPI of 1960. The base for DA calculation is the AICPI of 1960.
In India, two main wage settlements terms exist: Wage Settlements of 1.1.1997 and 1.1.2007. The base point was 1708 on 1.1.1997 and 2884 on 1.1.2007.
For example, let's calculate the AICPI for July '10. This is equivalent to the average of the previous March, April, and May, which were recorded as 170, 170, and 172 (Base year 2001). Multiplying by 4.63 and rounding, we get 787, 787, and 796 (Base year 1982). By multiplying by 4.93 and rounding, we get 3880, 3880, and 3924 (Base year 1960). The average of these three rounded figures is 3895.
For the 1.1.97 scale, the DA calculation is as follows: Total points - 3895, Base points - 1708, Total - Base = 2187. The percentage is 2187/1708 x 100 = 128.0 (correct to one decimal).
For the 1.1.2007 scale, the DA calculation is: Total points - 3895, Base points - 2884, Total - Base = 1011. The percentage is 1011/2884 x 100 = 35.1 (correct to one decimal).
I will attach an Excel sheet for IDA calculation effective from 1.10.2008. You can extend the rows as needed and enter the three indexes towards the year 2001 in green-colored columns. The results will be displayed in yellow, while red is used for static information.
With regards,
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Limited, PALAKKAD - 678 623,
KERALA, INDIA.
+91 9447 467 667
AICPI (base 2001) can be found on the following site:
Labour Statistics Page 2
From India, Bangalore
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The devaluation of money can be assessed through the Wholesale Price Index, All India Consumer Price Index, etc. The key difference between these two is that the Wholesale Price Index takes into account the price variation of all commodities.
However, for the All India Consumer Price Index, there are some differences and limitations:
1. It focuses on a specific consumer, namely the Industrial Worker.
2. It defines a "basket of goods," comprising specified goods and services.
3. It considers both the price variation of commodities and their consumable quantity.
4. It selects 78 centers across India to calculate the average.
Based on the All India Consumer Price Index, Industrial DA is paid, varying in quarters starting from January, April, July, and October. For instance, the AICPI for January is the average of the previous September, October, and November. Similarly, for April, it is December, January, and February; for July, it is March, April, and May; and for October, it is June, July, and August.
When the devaluation of money is fully compensated, it is referred to as full DA neutralization. The formula for full DA neutralization is (Total points - Base points) / Base points (in percentage). The AICPI was introduced in India in 1960 and revised in 1982 and 2001. By multiplying the AICPI of 2001 by 4.63, we get the AICPI of 1982, and by multiplying the AICPI of 1982 by 4.93, we get the AICPI of 1960. The base for DA calculation is the AICPI of 1960.
In India, two main wage settlements terms exist: Wage Settlements of 1.1.1997 and 1.1.2007. The base point was 1708 on 1.1.1997 and 2884 on 1.1.2007.
For example, let's calculate the AICPI for July '10. This is equivalent to the average of the previous March, April, and May, which were recorded as 170, 170, and 172 (Base year 2001). Multiplying by 4.63 and rounding, we get 787, 787, and 796 (Base year 1982). By multiplying by 4.93 and rounding, we get 3880, 3880, and 3924 (Base year 1960). The average of these three rounded figures is 3895.
For the 1.1.97 scale, the DA calculation is as follows: Total points - 3895, Base points - 1708, Total - Base = 2187. The percentage is 2187/1708 x 100 = 128.0 (correct to one decimal).
For the 1.1.2007 scale, the DA calculation is: Total points - 3895, Base points - 2884, Total - Base = 1011. The percentage is 1011/2884 x 100 = 35.1 (correct to one decimal).
I will attach an Excel sheet for IDA calculation effective from 1.10.2008. You can extend the rows as needed and enter the three indexes towards the year 2001 in green-colored columns. The results will be displayed in yellow, while red is used for static information.
With regards,
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Limited, PALAKKAD - 678 623,
KERALA, INDIA.
+91 9447 467 667
AICPI (base 2001) can be found on the following site:
Labour Statistics Page 2
From India, Bangalore
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