Labor Ministry has indicated to change the formula for calculation of dearness allowance. In fact, it has released a new series of Wage Rate Index (WRI) with the base year 2016. It is being maintained by the Labor Bureau of the Ministry. The Labor Ministry said that the new series of WRI with base year 2016 will replace the old series of base year 1963-65.
Government changes base year
According to Harishankar Tiwari, former president of the AG Office Brotherhood, on the basis of inflation data, the government periodically revises the base year for key economic indicators to reflect changes in the economy and workers. salary pattern should be included.
Labor organization had recommended
That is why as per the recommendations of International Labor Organization (ILO), National Statistical Commission etc., in order to widen the scope and make the index better, the Labor Bureau has changed the base year of Wage Rate Index from 1963-65 to 2016.
How Dearness Allowance is calculated (DA Calculation Formula)
The current rate of dearness allowance is multiplied by your basic pay, the amount of dearness allowance is arrived at. For example, the current rate of percentage is 12%, if your basic salary is Rs 49000 DA (49000 x12)/100.
What is dearness allowance
Dearness Allowance can be understood as a component of salary, which is a certain percentage of basic pay. Dearness Allowance is given to reduce the effect of inflation. Since DA is directly related to the cost of livelihood, the DA component is different for different employees depending on their location. This means that DA is different for employees of urban area, semi-urban area or rural area.