8th Pay Commission Indian Railway: There’s good news for Indian Railway employees. With the implementation of the 8th Pay Commission, employees’ salaries are set to increase significantly. Keeping this in mind, Indian Railways has already begun preparations.
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8th Pay Commission Indian Railway: Good news for Indian Railway employees. The implementation of the 8th Pay Commission is expected to result in a significant salary increase. Keeping this in mind, the Indian Railways has already begun preparations to prepare for the upcoming increase in employee salaries. A significant increase in railway expenditure is expected after the implementation of the 8th Pay Commission recommendations. In view of this, the Railways has initiated several cost-cutting and savings measures to strengthen its finances.
Report to be submitted in 18 months
The 8th Pay Commission was constituted in January 2025 and has been given 18 months to submit its report. This means the Railways have limited time to improve its financial position before January 2026. The Railways learned a significant lesson from the previous experience with the 7th Pay Commission. When the Seventh Pay Commission was implemented in 2016, employees’ salaries increased by 14 to 26 percent, increasing the annual burden on salaries and pensions by approximately ₹22,000 crore. Now, according to internal estimates, this additional burden could reach ₹30,000 crore after the Eighth Pay Commission.
Railways Increases Focus
However, railway officials appear confident about this challenge. They say a comprehensive plan is already underway to manage the rising costs. The focus is on internal resources, operational efficiency, and increasing freight revenue.
The Railways’ operating ratio was 98.90 percent in the fiscal year 2024-25, with a net income of ₹1,341.31 crore. For the fiscal year 2025-26, the target is to slightly improve the operating ratio to 98.43 percent. Net revenue is projected to increase to ₹3,041.31 crore.
Railways Focus on Savings
The Railways also expects significant relief from power savings. Electrification of the entire rail network is expected to generate annual savings of approximately ₹5,000 crore. Furthermore, payments to the Railway Finance Corporation (IRFC) will also decrease from the financial year 2027-28, as a significant portion of capital expenditure in recent years has been funded through budgetary support.
Demands from employee unions could also pose challenges for the Railways. The Seventh Pay Commission implemented a 2.57 fitment factor, while unions are now demanding a 2.86 fitment factor. If this demand is met, salary expenditure could increase by more than 22 percent.
Despite all this, the Railways remains confident that it will be able to manage its financial situation. In line with this approach, the budget for employee salaries has been increased to ₹1.28 lakh crore for the financial year 2025-26, up from ₹1.17 lakh crore last year. The allocation for pensions has also been increased. The Railways believes that proper planning and increased income will help offset the impact of the Pay Commission.
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