8th Pay Commission: Railways slashes maintenance, energy costs ahead of Salary Hike

The Indian Railways has started working to implement cost-cutting measures in key sectors like maintenance, procurement, and energy usage. These measures will be taken to prepare for the expected salary and pension hikes as the 8th Pay Commission is expected to come early next year.  

The Central Pay Commission will likely submit its proposals which once approved will be implemented from January 1, 2026.  

An Indian Railways official told ET that they have planned to meet the additional fund requirement through internal savings, anticipated savings, and increased freight earnings. For 2025-26, the Railways aims for a 98.43% operating ratio and Rs 3,041.31 crore net revenue. Indian Railways is facing financial challenges, with an operating ratio (OR) of 98.90% in 2024-25 and a net revenue of Rs 1,341.31 crore. For 2025-26, they project an OR of 98.42% and Rs 3,041.31 crore net revenue, indicating ongoing margin pressure despite increased revenue. 

The government formed the pay panel, constituted every 10 years, in October, after several delays and approved the Terms of Reference for the 8th Central Pay Commission, marking a key step in the process to review and revise the pay structure and service conditions of central government employees.  

The 8th Central Pay Commission will function as a temporary body comprising one Chairperson, one Part-Time Member, and one Member-Secretary. The Commission has been directed to submit its recommendations within 18 months from the date of its constitution and may, if necessary, submit interim reports on specific matters as and when finalised.