7th Pay Commission: Crores of Indians to benefit under Variable Dearness Allowance

The benefit will be applied retrospectively from April 1, 2021.


A Variable Dearness Allowance (VDA) is revised on the basis of Consumer Price Index for Industrial Workers (CPI-IW). The aim of Dearness Allowance is boost the take-home income to counter the effects of inflation for the employees of the governments.

A hike has been announced in the daily wages using VDA of those employed in the scheduled employment under the authority of the central government. For this, the data of CPI-IW for the months of July to December 2020 was used.

It must be clarified that the regular Central Government Employees do not come under VDA, they come under Dearness Allowance (DA). The DA hike for the regular employees is pending from January 2021. For them, the changes are expected to be announced in June.

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The Ministry of Labour and Employment announced, "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."

Workers in the railway administration, mines, oil fields, ports and other sectors in the central government come under the ambit of this change.

The hike will be applicable retrospectively from April 1, 2021. Further, the benefit will be equally applicable to all contractual and casual workers.

The cumulative benefit is expected to be an increase in the range of Rs 2,000 to 5,000 per month.

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Specifically, unskilled mine workers working on the ground will draw Rs 431 per day, those working underground will draw Rs 539 per day. Highly skilled mine workers working on ground will now draw Rs 752 per day, and those working underground will draw Rs 840 per day.

Similar changes have been made for other endeavours across skill categories like agriculture, building and construction, sweeping and cleaning, watch and ward, loading and unloading.

The Union Labour and Employment Minister Santosh Gangwar shared notion that the hike in the VDA is also meant to benefit these workers in the trying times of pandemic COVID. The enforcement of the Minimum Wages Act in the central sphere is ensured through the offices of the Chief Labour Commissioner (Central).

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