Variable Dearness Allowance revised: Minimum wages hiked from October 1. Details here

The Variable Dearness Allowance (VDA) has been revised by the central government, leading to a substantial rise in minimum wages for unorganised sector workers. The updated wage rates became effective as of October 1. The Ministry of Labour and Employment confirmed that employees in industries including building construction, loading and unloading, security services, cleaning, housekeeping, mining, and agriculture under central sphere establishments will experience the positive impact of the adjusted wages.

"Workers engaged in various sectors, including building construction, loading and unloading, watch and ward, sweeping, cleaning, housekeeping, mining, and agriculture within central sphere establishments, will benefit from the revised wage rates," the Ministry of Labour and Employment said in a press release dated September 26, 2024.

The government pays Dearness Allowance (DA) to its employees and pensioners as a measure to counter the impact of inflation. The objective is to ensure that the effective salary of government employees is continuously adjusted to address rising prices. Variable Dearness Allowance (VAD) is a specific type of DA that is paid to Central Government employees. It is revised every six months based on changes in the Consumer Price Index (CPI) in order to mitigate the effects of inflation.

VDA is comprised of three main elements: Variable DA (which remains constant), Base index, and CPI. The Variable DA component remains unchanged until there is an adjustment to the basic minimum wages by the government. Similarly, the base index remains fixed for a set period of time. However, the CPI fluctuates monthly, impacting the value of VDA.

The government typically updates the VDA biannually on April 1st and October 1st, taking into account the six-month average growth in the Consumer Price Index (CPI) for industrial workers.

The updated minimum wage structure is organized based on skill levels - unskilled, semi-skilled, skilled, and highly skilled - and geographic regions. The regions are labeled as A, B, and C by the ministry.

What are the new minimum wage rates?
> Wages for unskilled workers range from Rs 783 in area A, Rs 655 in area B, and Rs 526 in area C.
> Semi-skilled and supervisory workers will now receive Rs 868 in area A, Rs 739 in area B, and Rs 616 in area C.
> Skilled or clerical workers will earn Rs 954 per day in area A, Rs 868 in area B, and Rs 739 in area C.
> Highly skilled workers receive the highest wages, with Rs 1,035 in area A, Rs 954 in area B, and Rs 868 in area C.

The Variable Dearness Allowance (VDA) has been rounded up to the nearest rupee following the decision of the Minimum Wages Advisory Board.

                               Rates of wages including VDA area wise per day (in Rs)

Worker Category	A	B	C
Unskilled	523+260=783	437+218=655	350+176=526
Semi-Skilled /Unskilled Supervisory	579+289=868	494+245=739	410+204=616
Skilled /Clerical	637+317=954	579+289=868	494+245=379
Highly Skilled	693+342=1035	637+317=954	579+289=868

Wages for construction and maintenance workers

The updated minimum wage will be implemented for individuals engaged in construction or maintenance tasks, including road and runway construction, building maintenance, and the laying of underground utilities such as electricity, telecommunications, water, and sewer lines.

The rates of Variable Dearness Allowance (VDA) for employees engaged in loading and unloading activities at various locations including Goods sheds, parcel offices of Railways, Other goods sheds, godowns, warehouses, docks and ports, as well as passengers and cargo services at airports (both international and domestic) are outlined below:

                 Rates of wages plus VDA per day

Area	Basic Wages (Rs.)	VDA (Rs)	Total (Rs)
‘A’	523	260	783
‘B’	437	218	655
‘C’	350	176	526

Stone mines     

The minimum piece rate wages with basic and Variable Dearness Allowance for employees employed in stone mines are as follows:

Category    Basic Wages         VDA         Total
Excavation & removal of over burden with 50 meters lead/ 1.5 meters lift

(i) Soft soil    Rs 351    +    Rs 179    =    Rs 530
(ii) Soft soil with rock    Rs 531    +    Rs 264    =   Rs 795
(iii) Rock    Rs 703    +    Rs 350    =    Rs 1053

Removal and stacking of rejected stones with 90 metres lead/ 1.5 metres lift. *   Rs 283    +   Rs 143    =   Rs 426

Stone breaking or stone crushing for the stone size of:

(i) 1.0 inch to 1.5 inches    Rs 2171    +   Rs 1061    =   Rs 3232
(ii) Above 1.5 inches to 3.0 inches    Rs 1857    +   Rs 907    =    Rs 2764
(iii) Above 3.0 inches to 5.0 inches    Rs 1088    +   Rs 535    =    Rs 1623
(iv) Above 5.0 inches    Rs 893    +    Rs 441    =    Rs 1334