Railways prepares for major salary hikes ahead of 8th Pay Commission

8th Pay Commission Update: Before the 8th Pay Commission, the railway is about to deliver some good news to its employees, including a salary increase before the 8th Pay Commission is implemented. Learn about the master plan the railway has developed for this.

Indian Railways Salary Hike: The Indian Railways has intensified preparations to increase employee salaries even before the implementation of the 8th Pay Commission. Anticipating the significant financial burden of salaries and pensions in the future, the Railways is already working on strategies to reduce expenses, increase savings, and strengthen new sources of revenue. Signs are clear that a significant salary increase can be expected for railway employees after the implementation of the 8th Pay Commission.

When will the 8th Pay Commission report be released?

The 8th Pay Commission was constituted in January 2025, and its Terms of Reference (ToR) were issued on October 28, 2025. The Commission has been given 18 months to submit its recommendations. Therefore, the report is expected before January 2026. Given this limited time, the Railways has already begun efforts to strengthen its financial position.What was the experience of the 7th Pay Commission?

The Railways still remembers the impact of the 7th Pay Commission. After its implementation in 2016, employee salaries increased by 14% to 26%, resulting in an additional burden of approximately ₹22,000 crore annually on the Railways' salary and pension expenditure. Now, according to internal estimates, this burden could increase to ₹30,000 crore after the 8th Pay Commission.

Strategies to deal with rising expenses

According to railway officials, a concrete plan is already being made to deal with this challenge.

• Emphasis on increasing operational efficiency

• Strategy to increase revenue from freight transportation

• Better and more effective use of internal resources

Current financial position of the Railways

In the 2024-25 fiscal year, the railway's operating ratio was 98.90%, while net income during this period was recorded at ₹1,341.31 crore. Meanwhile, for the 2025-26 fiscal year, the operating ratio is targeted to decrease to 98.43%, and net revenue is projected to reach ₹3,041.31 crore.

Big savings on electricity and loans

Full electrification of the rail network is expected to result in annual savings of approximately ₹5,000 crore. Furthermore, payments to the Indian Railway Finance Corporation (IRFC) are also expected to decrease from 2027-28, as a significant portion of capital expenditure in recent years has been funded through budget support.

The fitment factor has become an important issue.

The demands of employee unions also pose a major challenge for the Railways. The 7th Pay Commission implemented a fitment factor of 2.57, while the unions are now demanding a fitment factor of 2.86. If this demand is accepted, salary expenditure could increase by more than 22%.

News is originally taken from: https://bit.ly/3YBoSSh

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