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    Question

    Which of the following is used for calculating dearness

    allowance to government employees for increase in prices in India?
    A Statutory Liquidity Ratio (SLR) Correct Answer Incorrect Answer
    B Interest rate Correct Answer Incorrect Answer
    C Bank rate Correct Answer Incorrect Answer
    D Consumer Price Index Number for Industrial Workers (CPI-IW) Correct Answer Incorrect Answer

    Solution

    CPI or Consumer Price Index is the only component amongst three that changes on a monthly basis and these changes result in the increase/decrease of the variable dearness allowance. Base Index: this component of the VAD remains constant for a fixed period of time.

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