Correct Option: B

The basis of determining dearness allowance (D.A.) to government employees in India is consumer price index. Dearness Allowance (DA) is an allowance paid to employees to compensate them for erosion of real income / wage due to inflation. The increase in the cost of living and the consequent erosion of income is measured in terms of a consumer price index number and, DA to be sanctioned to employees is determined on the basis of the percentage increase in that index.