Variable Dearness Allowance (VDA): Central government raises minimum wage rates for workers

The central government on Thursday announced an increase in minimum wage rates by revising the variable dearness allowance (VDA), a move aimed at supporting workers particularly engaged in the unorganised space. "This adjustment is aimed at helping workers cope with the rising cost of living," an official statement read. 

"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 new wage rates will take effect from October 1, 2024. Last revision was done in April 2024," said the Ministry of Labour and Employment. 

Variable dearness allowance (VDA) is a component of wage structures that helps in offsetting the impact of inflation on the earnings of workers.

It is a variable allowance that adjusts periodically based on changes in the cost of living. This cost of living is gauged by the Consumer Price Index (CPI)—the benchmark for retail inflation in the country.

The minimum wage rates are categorised based on skill levels—unskilled, semi-skilled, skilled, and highly skilled—as well as by geographical area (A, B, and C), the ministry noted. 

After revision, minimum wage rates in area “A” for workers in construction, sweeping, cleaning, loading, and unloading for unskilled work will be Rs 783 a day (Rs 20,358 per month) for semi-skilled Rs 868 a day (Rs 22,568 per month) for skilled, clerical and watch & wards without arms Rs 954 a day (Rs 24,804 per month) and for highly skilled and watch & ward with arms Rs1,035 a day (Rs 26,910 per month). 

The central government revises the VDA twice a year, effective from April 1 and October 1, based on the six-month average increase in the Consumer Price Index for industrial workers.

Detailed information regarding the minimum wage rates by sector, categories and area, is available on the website (clc.gov.in) of the Chief Labour Commissioner (Central), Government of India.