Which of the following allowance is a compensation for erosion in the purchasing power of wage earner due to price rise?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Dearness Allowance.
Dearness Allowance is a compensation for erosion in the purchasing power of wage earner due to price rise. It is granted by the Government periodically as a percentage of (Basic Pay + Dearness Pay, if applicable).