The Labour Department of Rajasthan has recently issued a notification on November 25th, 2024, regarding the Variable Dearness Allowance (VDA) based on the recommendations of the Engineering Wage Board. This notification pertains to the adjustment of wages for industrial workers in accordance with the updated Consumer Price Index (CPI) and the linking factors developed by the Labour Bureau, Shimla.
The key point of this notification is the calculation of VDA based on the All India Consumer Price Index Numbers (CPI) with a base year of 1949. This adjustment has been introduced following the discontinuation of the older CPI series (Base years: 1949, 1960, 1982, 2001) and the introduction of a new CPI series (Base year: 2016). The new CPI series (Base 2016=100), effective from September 2020, has led to the need for adjustments to continue with the VDA calculation for the workers.
How the New VDA Calculation Works
The Labour Bureau, Shimla, has provided linking factors to convert CPI numbers from the new series (Base 2016=100) into the old series (Base 1949=100). The linking factors used in this calculation are as follows:
- 2.88: For linking 2001 series to 2016.
- 4.63: For linking 1982 series to 2001.
- 4.93: For linking 1960 series to 1982.
- 1.2154: For linking 1949 series to 1960.
These linking factors have been applied to the CPI data for the period from April 2024 to September 2024. Based on this calculation, the Average CPI for the period April 2024 to September 2024 has been determined.
Key Findings of the VDA Calculation:
- The average CPI for the previous period (October 2023 to March 2024) was 11,097 points.
- The average CPI for the period under review (April 2024 to September 2024) is 11,310 points.
- This shows an increase of 213 points in the average CPI, which has resulted in an increase in the Variable Dearness Allowance (VDA) for industrial workers.
Detailed Breakdown of CPI Calculations:
The following table outlines the calculated CPI for the period from April 2024 to September 2024, showing the steps involved in the conversion of CPI numbers from Base 2016=100 to Base 1949=100.
| Month/Year | CPI Base 2016 (as intimated by Labour Bureau) | Calculated CPI Using Linking Factor 2.88 (2016-2001) | Calculated CPI Using Linking Factor 4.63 (2001-1982) | Calculated CPI Using Linking Factor 4.93 (1982-1960) | Calculated CPI Using Linking Factor 1.2154 (1960-1949) | Final CPI Base 1949 (Rounded) |
| April 2024 | 139.4 | 401.47 | 1858.81 | 9163.91 | 11137.82 | 11138 |
| May 2024 | 139.9 | 402.91 | 1865.47 | 9196.78 | 11177.77 | 11178 |
| June 2024 | 141.4 | 407.23 | 1885.47 | 9295.39 | 11297.62 | 11298 |
| July 2024 | 142.7 | 410.97 | 1902.79 | 9380.76 | 11401.38 | 11401 |
| August 2024 | 142.6 | 410.68 | 1901.45 | 9374.14 | 11393.33 | 11393 |
| September 2024 | 143.3 | 412.70 | 1910.80 | 9420.25 | 11449.37 | 11449 |
This is an increase of 213 points compared to the previous period, from October 2023 to March 2024, which had an average CPI of 11,097 points.
