DA Hike Latest News: What is Variable Dearness Allowance VDA, Who will benefit? Explained

Dearness Allowance Hike Latest News: The Central Government has revised the rate of Variable Dearness Allowance (VDA) with effect from April 1, 2021. Amid the second wave of Covid-19 across the country, the revised VDA will provide relief to workers engaged in various scheduled employments in the central sphere. It should be noted that the revised VDA is not meant for regular Central Government Employees, for whom DA hike is pending since January 2021 and expected to be announced in June.

Who will benefit from the revised VDA?

Labour and Employment Minister Santosh Gangwar said in a statement that the revised VDA will “benefit about 1.50 crore workers engaged in various scheduled employments in central sphere across the country. This hike in VDA will support these workers particularly in the current pandemic times.”

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Ministry of Labour & Employment said in its statement, “The rates fixed for scheduled employment in Central sphere are 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.”

Revised VDA rates

How is VDA revised?

According to the Ministry of Labour & Employment, the VDA is revised on the basis of the average Consumer Price Index for industrial workers (CPI-IW).

CPI-IW is a price index compiled by Labour Bureau. For the latest VDA revision, the average CPI-IW for the months of July to December 2020 was used. The Minimum Wages Act is enforced in the Central sphere through the Inspecting Officers of the Chief Labour Commissioner (Central).

The Dearness Allowance hike for Central Government Employees has been delayed due to the Covid-19 pandemic. It is now expected that a DA hike of 4 per cent of the basic salary of Central Government Employees may be announced next month (June 2021).