In what comes as good news for millions of Central government employees, Centre has announced an increase in variable dearness allowance (VDA). The dearness hike ranges from Rs 105 to Rs 210 per month.
The hike in the DA will come in effect from April 1, 2021, as per the latest notification by the labour and employment ministry. This revised rate of VDA is said to benefit 1.5 crore workers.
"It will be for scheduled employment in the central sphere and applicable to the establishments under the authority of central government, railway administration, mines, oil fields, major ports or any corporation established by the central government. These rates are equally applicable to contract and casual employees/workers," the ministry of labour & employment said in a statement.
The VDA is revised on the basis of the average Consumer Price Index for Industrial Workers (CPI-IW), a price index compiled by the Labour Bureau.
"The VDA is revised on the basis of average Consumer Price Index for industrial workers (CPI-IW) a price index compiled by Labour Bureau. The average CPI-IW for the months of July to December 2020 was used for undertaking the latest VDA revision," a statement from the ministry read.
The hike will also lead to an increase in the rate of minimum wages for more than 15 million central sphere employees and workers.
"The enforcement of Minimum Wages Act in the central sphere is ensured through the inspecting officers of Chief Labour Commissioner (Central) across the country for employees engaged in the scheduled employment in the central sphere," labour ministry added.
The increased VDA will also result in an increase in the provident fund, gratuity, and other benefits that are directly linked with DA, News18 quoted Subodh Sadana, Partner, AnantLaw as saying.