Bumper increase in salary of railway employees due to 8th Pay Commission, but money tension is over!

Indian Railways is already planning to handle the increased salary expenses arising from the recommendations of the 8th Pay Commission. The Commission is taking steps to strengthen its financial position before implementation by reducing railway maintenance, purchasing and energy expenditure.

According to the report of Times of India, Railways is focusing on cost cutting to bear the burden of increased salaries of the employees. The 8th Central Pay Commission constituted in January 2024 will review the salaries, allowances and pensions of central government employees. This commission will study the changes in salary and other facilities and give its recommendations.

50 lakh employees will benefit

The recommendations of this commission, headed by former Supreme Court judge Ranjana Prakash Desai, are expected to be implemented from January 1, 2026. This will affect about 50 lakh central employees and 69 lakh pensioners, including defense services employees.

The commission will prepare its report in 18 months and may also give an interim report if needed. Indian Railways had an operating ratio of 98.90% in fiscal year 2024-25, generating a net income of Rs 1,341.31 crore, TOI reported. The operating ratio for 2025-26 is targeted at 98.42% and net income is expected to be Rs 3,041.31 crore.

There will be no shortage of money

Meanwhile, annual payments to the Indian Railway Finance Corporation (IRFC) are likely to decline in financial year 2027-28 as recent large infrastructure spends have been met with budgetary support from the government. Officials told TOI there are no plans to take new short-term loans as of now.

According to an official, when the salary burden increases in 2027-28, the annual income from freight transportation will increase by about Rs 15,000 crore. Railways will ensure that its financial position is strong enough to easily bear this expense. He clearly said that there will be no shortage of money.

7th pay commission

The 7th Pay Commission was constituted in February 2014. Its recommendations came into effect from 1 January 2016. Generally, Pay Commission recommendations are implemented every 10 years. The government had earlier said that as per the same tradition, the impact of the recommendations of the 8th Central Pay Commission is also expected from January 1, 2026.

Dearness Allowance (DA) is given to employees to compensate for the reduction in the real value of their salary due to inflation. The DA rate is changed every six months based on inflation data.