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Question
A worker currently earns a dearness allowance of Rs.10,100 per year and his dearness allowance in the base year of 1985 is Rs.1,300 per year. What should be the hike in his dearness allowance in order to maintain the same standard of living with time if the WPI today is 780?
A worker currently earns a dearness allowance of Rs.10,100 per year and his dearness allowance in the base year of 1985 is Rs.1,300 per year. What should be the hike in his dearness allowance in order to maintain the same standard of living with time if the WPI today is 780?
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Solution
The correct option is D 40
Given, WPI = 780
Current dearness allowance = Rs.10,100
Base dearness allowance = Rs.1,300
Since, WPI has become 7.8 times its value (100) at the base year of 1985.
Therefore, the dearness allowance should be commensurate i.e. it should also be 7.8 times the value in 1985.
⇒ S01 = 7.8×1,300 = Rs.10,140
⇒ Required increase in dearness allowance = 10,140 – 10,100 = Rs.40
40
Given, WPI = 780
Current dearness allowance = Rs.10,100
Base dearness allowance = Rs.1,300
Since, WPI has become 7.8 times its value (100) at the base year of 1985.
Therefore, the dearness allowance should be commensurate i.e. it should also be 7.8 times the value in 1985.
⇒ S01 = 7.8×1,300 = Rs.10,140
⇒ Required increase in dearness allowance = 10,140 – 10,100 = Rs.40
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