ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Retirement gratuity is calculated 1/4th of a month’s Basic Pay plus Dearness Allowance drawn on the date of retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity.

Detailed explanation-2: -Unlike employee provident fund which includes employee’s contribution, the gratuity amount is entirely paid by the employer. Under the Payment of Gratuity Act, 1972 a certain percentage of the salary is calculated and deposited in a gratuity account payable later.

Detailed explanation-3: -Dearness Allowance (DA) is the cost-of-living adjustment allowance that the government provides to both current and retired members of the public sector. Both employees in India and Bangladesh are covered by the DA component of the compensation. It is determined using the government employee basic salary percentage.

Detailed explanation-4: -Industrial Dearness Allowance. The Indian Government pays this allowance to the employees of public sector companies. Variable Dearness Allowance. The Central Government offers this dearness allowance to those employees employed under it. Consumer Price Index. 30-Jan-2023