On Friday, the Labor Department increased the variable cost allowance, a wage component, for more than 1.5 crore of workers in sectors under the jurisdiction of the Union government by ₹105 to ₹210 per month, as of April 1 of this year.

The increase in the variable cost allowance (VDA) is indexed to the consumer price index of industrial workers (CPI-IW), a price index compiled by the labor office. The latest increase will also automatically lead to an increase in the minimum wage rate for employees and workers in sectors controlled by the Union government. These sectors include mining, surveillance and service, and road construction.

In a statement, the Ministry of Labor said the revised benefits would be a “major relief at a time when the country grapples with the second wave of the Covid-19 pandemic”.

Labor Minister Santosh Gangwar said the overhaul would benefit around 10.5 million workers engaged in various forms of central employment across the country.

“This hike in the variable cost allowance will support these workers especially during the current pandemic,” he said in a statement.

The increases are administered under the Minimum Wage Act in sectors over which the Center has jurisdiction through the offices of the Chief Labor Commissioners across the country.

“The change in the minimum wage will be based on skill level and city or town of work,” said DPS Negi, chief, labor commissioner. VDA for industrial workers is similar to the cost allowance for permanent government employees.