Deal All, I would to know the Basic/DA calculation based on consumer index. Please help me - urgent regards kanaka
From India, Madras
12From India, Madras
Dear Kanaka,
I refer to your query relating to Basic / DA computation and assume that this is related to factory workers.
Basic wages are fixed by the respective State Governments and normally remains fixed for longer periods unless there is major restructuring needed (recently done in Tamilnadu)
Dearness allowance is that component of the wages which will help the wage earner to cope with the rising prices and is based on the Consumer price indices that are prevalent in that region, at the time when revision of DA is made. When dearness allowance is revised it is normally done in terms of Paise / rupees per point of CPI. Please note that there are two different types of CPIs. CPI - U for consumers and CPI - IW for industrial workers. Also, CPI is pegged to a base year which is taken as the benchmark. Each base year would reflect a specific no of CPI points. Till some time ago, CIP - IW used to take 1982 as base year but recently is has been changed to base year 2001.
For example: If the notification says that DA needs to be given @ 50 paise for every CPI more than the CPI of the base year 2000 and we are in 2006. We need to add up the CP indices of all the months of 2006, divide it by the no of months to arrive at an average CPI point level.
Now, if the CPI points for base year is 450 and the current CPI points are 550. Then the new DA would be:
550 minus 450 multiplied by .50
ie: 100*0.50 = Rs.50
Hope you understood what you wanted to.
Best regards,
Raja G
From India, Faridabad
I refer to your query relating to Basic / DA computation and assume that this is related to factory workers.
Basic wages are fixed by the respective State Governments and normally remains fixed for longer periods unless there is major restructuring needed (recently done in Tamilnadu)
Dearness allowance is that component of the wages which will help the wage earner to cope with the rising prices and is based on the Consumer price indices that are prevalent in that region, at the time when revision of DA is made. When dearness allowance is revised it is normally done in terms of Paise / rupees per point of CPI. Please note that there are two different types of CPIs. CPI - U for consumers and CPI - IW for industrial workers. Also, CPI is pegged to a base year which is taken as the benchmark. Each base year would reflect a specific no of CPI points. Till some time ago, CIP - IW used to take 1982 as base year but recently is has been changed to base year 2001.
For example: If the notification says that DA needs to be given @ 50 paise for every CPI more than the CPI of the base year 2000 and we are in 2006. We need to add up the CP indices of all the months of 2006, divide it by the no of months to arrive at an average CPI point level.
Now, if the CPI points for base year is 450 and the current CPI points are 550. Then the new DA would be:
550 minus 450 multiplied by .50
ie: 100*0.50 = Rs.50
Hope you understood what you wanted to.
Best regards,
Raja G
From India, Faridabad
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