Kerala Revises Variable Dearness Allowance for Shops and Software Sector Based on July 2025 CPI

The Government of Kerala, through its Labour and Skills Department, has announced the revised Variable Dearness Allowance (VDA) for employees in the Shops and Commercial Establishments and the Computer Software Sector, as per the provisions of the Minimum Wages Act, 1948.

The revision follows the publication of the Consumer Price Index (CPI) Numbers for July 2025 by the Department of Economics and Statistics, vide Notification No. DES/1129/2025-P3(1) dated 26th September 2025.

🔍 What is VDA?

Variable Dearness Allowance (VDA) is a component of wages linked to the Cost of Living Index, adjusted periodically based on changes in the Consumer Price Index Numbers. It ensures that real income remains stable despite inflation.

📊 July 2025 Consumer Price Index Numbers

The CPI is calculated separately for Agricultural Labourers and Industrial Workers. The current index is based on the 2011–12 series (base year) and converted to the older 1998–99 series using government-approved linking factors (as per G.O.(MS) No.34/2015/LBR dated 26-03-2015).

Below is a summary of CPI movements across various centres for July 2025:

Sl. No	Centre	Linking Factor	CPI (June 2025)	CPI (July 2025)	Old Series (1998–99)
1	Thiruvananthapuram	2.11	217	220	458 → 464
2	Kollam	2.09	214	216	447 → 451
3	Punalur	2.10	209	209	439 → 439
4	Pathanamthitta	2.03	225	229	457 → 465
5	Alappuzha	2.05	215	218	441 → 447
6	Kottayam	2.08	224	225	466 → 468
7	Mundakayam	2.17	227	228	493 → 495
8	Idukki	1.97	218	221	429 → 435
9	Ernakulam	2.03	208	209	422 → 424
10	Chalakkudy	2.00	226	227	452 → 454
11	Thrissur	1.87	223	225	417 → 421
12	Palakkad	2.09	202	202	422 → 422
13	Malappuram	2.00	221	223	442 → 446
14	Kozhikode	2.02	224	225	452 → 455
15	Wayanad	1.93	219	219	423 → 423
16	Kannur	2.02	227	227	459 → 459
17	Kasargod	2.05	236	240	484 → 492

🔸 Note: The linking factors are used to convert index values from the 2011–12 base year to the older 1998–99 base year for continuity in wage calculations.

🏢 Sectors Affected by the Revised VDA

The following employment sectors are directly impacted:

• Shops and Commercial Establishments
• Computer Software Sector

📌 Implications for Employers & Workers

• Employers in the affected sectors must recalculate VDA-linked wages based on the updated CPI for July 2025.
• Employees will see an increase in their wages to match rising living costs.
• The Labour Department may issue specific wage rate tables shortly, using these CPI numbers.

⚠️ Compliance Reminder

Employers must ensure prompt implementation of the revised VDA to remain compliant with the Minimum Wages Act, 1948. Failure to adjust wages in accordance with CPI-linked revisions may attract penalties.