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Indian Railways prepares for 8th Pay Commission impact
15 Dec
Summary
- Railways plans cost-cutting measures amid rising staff expenses.
- 8th Pay Commission recommendations may increase costs by Rs 30,000 crore.
- Electrification target to reduce annual costs by Rs 5,000 crore.
Indian Railways is actively implementing cost-control strategies across maintenance, procurement, and energy consumption in anticipation of increased staff expenses due to the 8th Pay Commission. The commission, established in January 2025, has 18 months to submit its report, creating a tight timeline for financial realignment.
Internal projections suggest the upcoming wage revision could escalate costs by approximately Rs 30,000 crore, a significant jump from the previous commission's impact. Officials remain optimistic, citing planned internal accruals, efficiency improvements, and anticipated growth in freight revenues as sufficient buffers.
To mitigate these costs, Indian Railways is prioritizing full network electrification, which is projected to save Rs 5,000 crore annually. Additionally, freight earnings are expected to rise by Rs 15,000 crore when higher wages become payable in 2027-28.
