If we want to introduce DA with other salary components, whether it is applicable for staff & workmen?

- If we want to introduce DA with other salary components, whether it is applicable for staff & workmen both or only for the workman??

- Can we introduce both DA & VDA, at a time, If not, could you please elaborate the reason. ????

Our esteemed are requested to educate us on the above.

Dearness Allowance as a component of salary can be given to all employees irrespective of grades. This is probably the only component which is paid common to all because it is based on the consumer price index, Obviously, the retail price is common for all.

DA shall be fixed DA or Variable DA. The later is linked to CPI whereas FDA is fixed as a percentage of Basic pay or a lump sum amount. Depending upon the policy of the company, you can chose to have DA and VDA. FDA will remain unchanged for a year or until the basic salary is changed whereas the VDA will change whenever the CPI changes. Normally, the workers will get VDA and others who are not under the minimum wages notifications get FDA.

Different states have different protocols with regard to fixing of VDA. It may be annually revised or it can be revised in half yearly. It can also be revised quarterly. The details of VDa will be available in the official websites of labour department. If you wish to revise it every month, you can do it by finding out the CPI from the department of Economics and Statistics.

Thanks Madhu Sir for your prompt response.
I have got few points below for your kind clarification, sir:


As per the Lab.Dept.of Karnataka Govt., there is yearly one time increase of 510.00 in VDA for 22-23 than the year 21-22, applicable from April 22.
But, when we talk about quarterly increase in VDA , as per your reply, is that the split of Rs.510.00 in different quarter. So that total increase in VDA in different quarter together amounts to Rs.510.00.

Increase in VDA need not be quarterly. In Tamil Nadu, for example, it is revised once in a year. In many other states including Karnataka, I believe, it is revised every six months. In Kerala, however, the revision is to be made by the respective establishments every month based on the CPI published by the department of Economics and Statistics. Normally, the revision in CPI will take place every three months positively. Therefore, it is not necessary that you should make revision every three months. Moreover, in your case, yours being a government department, I don't think that the dearness allowance calculation as per our private establishments will have any relevance.

So far my knowledge goes except Minimum wages there is no other act (s) where payment of DA and VDA is a component of remuneration package. In Central Govt. and State Govt. have VDA as a component of remuneration determined by Pay commission. In Banking sector also VDA is a part of remuneration package decided during Bi-partite negotiation.

To my knowledge most of the new private organizations are not paying any FDA or VDA. Even if there is any thing it may be for workers ( rare cases ). Old private organizations have VDA for unions. But there is no VDA for management staff probably all old and new organizations.

Now come to revision of VDA. We most of the time consider revision of VDA based on Govt. of the State/ Central which is made for minimum wages. There are many old private organizations where union(s) has implemented VDA as a part of the remuneration and with different VDA scheme. CPI data is available against different base years monthly basis. VDA scheme may be neutralization of increase index by a certain money value as agreed between Management and Union. It may be % wise neutralization. It may be monthly , quarterly, 6th monthly or yearly.

In WB we have noticed it is quarterly review. It is basically difference of average index for a quarter vs average index of another quarter. For example

INDEX QUARTER PAYABLE QUARTER

JAN, FEB, MAR JUNE, JULY , AUG

APR, MAY JUNE SEPT, OCT, NOV

JULY, AUG, SEPT DEC, JAN, FEB

OCT, NOV, DEC MAR, APR, MAY

There is gap of two months between index quarter to payable quarter because of non-availability of data on time. The base year in most of the organizations ( 1960 =100 )


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In AP & Telangana the VDA revision takes place once in six months for MW Scheduled wages. However, some establishments implement VDA for their employees as per settlement or custom. However, to pay to whom i.e. workers or staff or both depends on company policies or established practices in private establishments. There are some companies wherein staff also part of wage settlements and the same will be applicable as per its terms.

Dear Gopalnanda,

' Staff ' is a collective noun in employment parlance indicating the people engaged in administrative activities which will include managerial and supervisory Cadre as well as clerical Cadre employees falling under the definition of workman such as clerks, cashiers,accountants etc. If these employments are included in the G.O fixing the minimum rates of wages, they also should be paid D.A as stipulated therein.