Central government revises Variable Dearness Allowance (VDA) for scheduled employment effective October 1, 2025

In a move aimed at safeguarding the purchasing power of workers, the Central Government has revised the Variable Dearness Allowance (VDA) for scheduled employments, effective 1 October 2025. The revision, notified by the Office of the Chief Labour Commissioner (Central) under the Ministry of Labour & Employment, applies to a broad range of employments including construction, mining, agriculture, sweeping and cleaning, watch and ward, loading and unloading, and other sectors covered under the Central Government’s Minimum Wages notifications. This adjustment ensures that minimum wages remain responsive to fluctuations in the cost of living and inflationary pressures.

The revision of VDA is based on the Consumer Price Index for Industrial Workers (CPI-IW), which rose from 402.09 (as on 31 December 2024) to 413.42, marking an increase of 11.33 points. This indexation mechanism ensures that wage adjustments are directly linked to inflation, allowing workers’ real incomes to keep pace with rising costs of essential goods and services. The government revises the VDA twice a year, on 1 April and 1 October, based on the CPI-IW data, demonstrating a systematic approach to protecting workers in the unorganised and semi-organised sectors from erosion of purchasing power.

To maintain consistency and ease of implementation, the revised VDA amounts are rounded to the nearest rupee as recommended by the Minimum Wages Advisory Board. This adjustment reflects the government’s commitment to fair wage practices and periodic rationalisation of pay structures in central sector establishments. By recalibrating wages according to the latest inflation trends, the government is providing timely relief to workers in sectors often exposed to fluctuating earnings and cost-of-living challenges.

All central sector establishments engaged in scheduled employments are required to update their wage structures effective 1 October 2025. Employers must ensure that the revised VDA is accurately reflected in wage calculations, payslips, and statutory registers, ensuring compliance with the Minimum Wages Act, 1948 and the rules framed under it. Proper incorporation of the VDA is essential not only for legal compliance but also for ensuring transparency and maintaining trust between employers and workers.

This revision is expected to benefit thousands of workers across the country, improving overall earnings and providing a cushion against inflationary trends. By periodically adjusting the VDA, the government reaffirms its commitment to protecting the economic welfare of workers, ensuring that their remuneration remains fair, competitive, and aligned with contemporary economic realities.