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.
Madhu.T.K
From India, Kannur
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4477There 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.
Madhu.T.K
From India, Kannur
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Dear Sir,
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
From India, Ahmadabad
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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
From India, Ahmadabad
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Cost of Living Index is a statistical calculation considering the consumer prices of various commodities. Since the prices vary from place to place, we will have different CPI for different places. The Dearness Allowance or Special Allowance, as part of statutory minimum wages, aims to adjust the wages according to the increase (or decrease) in the consumer price indices. It will be a certain amount based on a certain base index (say, 100), and with every increase in the price index, the DA will be earned.
In some states like Kerala, the Variable Dearness Allowance is changed every month if there is a change in CPI. However, in some other states like Tamil Nadu, it is fixed for one year and is determined after considering the average CPI for the whole year. The effect is to compensate 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.
Madhu.T.K
From India, Kannur
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In some states like Kerala, the Variable Dearness Allowance is changed every month if there is a change in CPI. However, in some other states like Tamil Nadu, it is fixed for one year and is determined after considering the average CPI for the whole year. The effect is to compensate 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.
Madhu.T.K
From India, Kannur
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