Question

Dearness Allowance is paid to the government employees using

• A. National income
• B. Per capita income
• C. Wholesale price index
• D. Consumer price index

Hint:

Dearness Allowance is adjusted according to inflation rates, which are measured using the Consumer Price Index (CPI).

Answer 1

The Correct Option is D

Step 1: Understanding Dearness Allowance.
Dearness Allowance is a cost of living adjustment allowance paid to government employees to offset the impact of inflation. It is typically calculated using the Consumer Price Index (CPI), which measures the average change over time in the prices of goods and services typically consumed by households.

Step 2: Conclusion.
Therefore, the Dearness Allowance is based on the Consumer Price Index (CPI).

Final Answer: Consumer price index.