Question

The basis of determining dearness allowance to employees in India is

• A. National Income
• B. Consumer Price Index
• C. Standard of Living
• D. Per Capita Income

Answer 1

The correct option is B Consumer Price Index

Consumer Price Index: It is also known as 'Cost of living Index' or 'Retail Price Index'. It does not measure actual cost of living or the various reasons of its fluctuations, rather it measures only changes in price level. Consumer Price Index only tells that how much more price has to be paid for a commodity by the consumer in the current year as compared to the base year.