The government has revised the Variable Dearness Allowance (VDA) for employees working in several sectors, including agriculture, certain types of construction and maintenance work. The change has come into effect from October 1, 2026 and has increased the minimum wages of employees in various skill categories. The change is based on the average Consumer Price Index for Industrial Workers (CPI-IW) rising from 424.80 to 431.42 (linked to base 2016=100) as of June 30, 2026, resulting in an increase in the index of 6.62 points. Let us also tell you what VDA is and how much per day salary has been increased for its various categories of workers.

What is VDA?

VDA is added to the basic wages to determine the minimum wages that the worker gets. Here is the modified minimum basic pay for different levels of workers.

Farming: Total Minimum Wages from October 1, 2026

For example, the minimum wage for an unskilled agricultural laborer in area A is Rs. 537 per day, with a basic pay of Rs. 333 and as VDA Rs. 204 will be included.

According to a Labor Bureau statement, the daily minimum wage for a highly skilled agricultural worker in Area A is Rs. 705, out of which Rs. 438 basic pay and Rs. 267 VDAs will be included.

VDA for Agricultural Laborers

Workers engaged in construction work: Revised VDA and Minimum Basic Wages

The VDA’s amendments also apply to workers engaged in the construction or maintenance of roads, runways and buildings, as well as certain utility operations. This includes works like laying underground electricity and communication cables, power lines, water supply lines and sewerage pipelines. The revised VDA for construction workers is as follows:

Construction work: Total minimum wage from October 1

Therefore, the minimum wage for an unskilled construction worker in Sector A will be Rs 840 per day from October 1. The minimum wage for highly skilled labor in the same area would be Rs 1,111 per day.

How is VDA calculated?

VDA is a variable salary that is linked to the Consumer Price Index. VDA stands for ‘Variable Dearness Allowance’ in pay. This is an inflation-related amount that is added to employees’ salaries to compensate for changes in the cost of living.

It is determined based on the average consumer price index for industrial workers. As on June 30, 2026, this index increased by 6.62 points from 424.80 to 431.42 (as per base year 2016=100).

As decided by the Minimum Wages Advisory Board, the revised VDA has been rounded off to the next higher rupee. It is important to note that VDA is only a part of the minimum wage. The final minimum wage is calculated by adding the applicable VDA to the basic wage.