Dear All, Please let me know how to calculate the VDA (Variable Dearness Allowance). Regards Ramesh Vuriti
From India, Hyderabad
3From India, Hyderabad
There are three components in the calculation of VDA. First the consumer price index, second the base index and the third the variable DA amount fixed by the Govt by notification. The third one will be fixed until the minimum wages is revised. Similarly the base index will also be fixed. The CPI will keep on changing every month.
Each industry will have separate DA amount fixed. The minimum wages notification will say what is the amount of DA per cost of living index/ consumer price index. Often it will be like DA for every point above a certain fixed base index. For example, it may be Rs 10 per point above 100. That means every increase in CPI above 100 points will get a DA of Rs 10. Now if the CPI of the locality (as fixed by the Economics & Statistics Department) is 420, then Variable DA to be given to the employees will be equal to Rs 3200 calculated as:
CPI = 420
Base Index = 100
Points for DA = 420-100= 320
DA amount per point= 10
Amount of DA for 320 points= 320X Rs 10= Rs 3200.
With every increase in CPI, the DA will increase by Rs 10. That is why it is Variable Dearness Allowance.
Regards,
Madhu.T.K
From India, Kannur
Each industry will have separate DA amount fixed. The minimum wages notification will say what is the amount of DA per cost of living index/ consumer price index. Often it will be like DA for every point above a certain fixed base index. For example, it may be Rs 10 per point above 100. That means every increase in CPI above 100 points will get a DA of Rs 10. Now if the CPI of the locality (as fixed by the Economics & Statistics Department) is 420, then Variable DA to be given to the employees will be equal to Rs 3200 calculated as:
CPI = 420
Base Index = 100
Points for DA = 420-100= 320
DA amount per point= 10
Amount of DA for 320 points= 320X Rs 10= Rs 3200.
With every increase in CPI, the DA will increase by Rs 10. That is why it is Variable Dearness Allowance.
Regards,
Madhu.T.K
From India, Kannur
Dear Friend,
One addl. tip for you. Cost of Price Index is generally taken from Labour Law Journal every quarter.
Ex. CPI per July-Sept.2011 is 4443.
CPI per Apr.-June 2011 is 4276.
Increase in CPI = 167 points.
Then Settlement VDA will be :
167 points x [cost agreed per point] in rupees.
This is available in Websites also eg.cyberjournalist
Regards,
Suresh K
From India, Chennai
One addl. tip for you. Cost of Price Index is generally taken from Labour Law Journal every quarter.
Ex. CPI per July-Sept.2011 is 4443.
CPI per Apr.-June 2011 is 4276.
Increase in CPI = 167 points.
Then Settlement VDA will be :
167 points x [cost agreed per point] in rupees.
This is available in Websites also eg.cyberjournalist
Regards,
Suresh K
From India, Chennai
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Dearness Allowance.xls
The Tamil Nadu Minimum Wages Dearness Allowance Notification March 2019.pdf