8th pay commission
Indian Railways is already making plans to handle the increased salary expenses due to the 8th Pay Commission. To strengthen its financial position before the implementation of the Pay Commission, Railways is taking steps to reduce expenses related to maintenance, procurement and energy.
According to the report of Times of India, Railways is doing 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 the salary and other facilities of the employees and give its recommendations.
50 lakh employees will benefit
This commission, headed by former Supreme Court judge Ranjana Prakash Desai, is likely to implement its recommendations from January 1, 2026. These recommendations will affect approximately 50 lakh central employees and 69 lakh pensioners, including defense services employees.
The commission will prepare its report in 18 months and will also present an interim report if needed. According to TOI report, the operating ratio of Indian Railways in the financial year 2024-25 was 98.90%, generating a net income of Rs 1,341.31 crore. The operating ratio for 2025-26 is targeted to be 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 funded with government budgetary support (GBS). Officials told TOI that at present there are no plans to take new short-term loans. According to an official, when the salary burden will increase in 2027-28, the annual income from freight transportation will also increase by about Rs 15,000 crore. Railways will ensure that its financial position is strong enough to handle this expenditure easily. He 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 January 1, 2016. Generally, Pay Commission recommendations are implemented every 10 years. The government had earlier said that as per the same tradition, the recommendations of the 8th Central Pay Commission are also expected to take effect from January 1, 2026.
Dearness Allowance (DA) is given to employees to compensate for the shortfall in the real value of their salary due to inflation. The DA rate is changed from time to time every six months based on inflation data.
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