Synopsis

Variable dearness allowance: The government has announced an increase in Variable Dearness Allowance affecting various sectors including agriculture and construction. This revision will take effect from October 1, 2026, and will adjust minimum wages for workers accordingly.

The government has revised the Variable Dearness Allowance (VDA) for workers employed in various sectors, including agriculture, specified construction and maintenance activities, among others. This revision is effective from October 1, 2026, and has resulted in increased minimum wages for workers across different skill categories.



In a statement dated October 1, the Labour Bureau of the Ministry of Labour & Employment said, “In exercise of the powers conferred by the central government vide Notification No. S.O. 2451(E) dated May 12, 2026, of the Ministry of Labour and Employment, the undersigned hereby revises the rates of Variable Dearness Allowance (VDA) for employees employed in Agriculture w.e.f. October 1, 2026, on the basis of the average Consumer Price Index for Industrial Workers reaching 431.42 from 424.80 as on June 30, 2026 (linked to Base 2016=100) and thereby resulting in an increase of 6.62 points.



What is VDA?

The VDA is added to the basic wage to arrive at the minimum wage payable to a worker.



Here are the revised minimum basic pays for different levels of workers.



Agriculture: Total minimum wages from October 1, 2026



For instance, an unskilled agricultural worker in Area A will have a minimum wage of Rs 537 per day, comprising a basic wage of Rs 333 and a VDA of Rs 204.



A highly skilled agricultural worker in Area A will receive a minimum wage of Rs 705 per day, comprising Rs 438 as the basic wage and Rs 267 as the VDA, as per the Labour Bureau’s statement.

VDA for agricultural workers

Construction workers: Revised VDA and minimum basic pay

The VDA revision also covers workers engaged in the construction or the maintenance of roads, runways and buildings, as well as specified utility works.



This includes activities such as laying underground electric and communication cables, electric lines, water supply lines and sewerage pipelines.



The revised VDA for construction workers is as follows:

Construction: Total minimum wages from October 1

Therefore, an unskilled construction worker in Area A will have a minimum wage of Rs 840 per day from October 1. For a highly skilled worker in the same area, the minimum wage will be Rs 1,111 per day.

How is the VDA calculated?

The VDA is variable pay linked to the Consumer Price Index. The VDA in a salary stands for Variable Dearness Allowance, an inflation-linked component added to employee wages to offset changes in the cost of living.



It is in accordance with the average Consumer Price Index for Industrial Workers, which increased by 6.62 points to 431.42 from 424.80 as of June 30, 2026 (linked to Base 2016=100).



The revised VDA has been rounded off to the next higher rupee in accordance with the decision of the Minimum Wages Advisory Board.



It is important to note that the VDA is only one component of the minimum wage. The final minimum wage is calculated by adding the applicable VDA to the basic wage.

(Join our ETWealth WhatsApp channel for all the latest updates)

Add as a Reliable and Trusted News Source
Add Now!

(Catch all the Personal Finance News, Breaking News, Budget 2025 Events and Latest News Updates on The .)

…more