In 1988, the Labour Ministers’ Conference suggested the wages mechanism be amended by linking it to the rise in Consumer Price Index in order to protect it against inflation. As a result, the idea of Variable Dearness Allowance was brought to the fore in the year 1991.
The Variable Dearness Allowance is revised twice a year; on the 1st of April and then again on the 1st of October. As of today, 26 UTs and States of India have provisions for Variable Dearness Allowance.