Multiple choice

The basis of determining dearness allowance to employees in India is

  1. standard of living

  2. national income

  3. per capita income

  4. consumer price index

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Option (4) is the correct answer. Dearness allowance is calculated as a percentage of an Indian citizen's basic salary to mitigate the impact of inflation on people. Initially, DA was given in response to demand of employees for wage revision, however later it was linked to Consumer Price Index.