8th Pay Commission: India Railways is all set to implement massive cost-cutting initiatives across procurement, maintenance and energy sectors. These measures will help it fortify its financial position before it deals with increased wage expenses, anticipated from the 8th Pay Commission.
Financial Implications-8th Pay Commission & More
Indian Railways recorded an operating ratio of 98.90 percent in fiscal 2024-25, resulting in a net revenue of ₹1,341.31 crore. The target operating ratio is 98.42 percent for 2025-26 with an anticipated net revenue of ₹3041.31 crore. Meanwhile, yearly payments to Indian Railway Finance Corporation (IRFC) are likely to see a decline in fiscal 2027-28 as recent capital expenditure has been primarily funded through gross budgetary support.
It was also remarked that annual freight earnings are likely to increase by ₹15,000 crore when higher wages need to be paid in 2027-28. The measures to implement cost-cutting initiatives by Railways is seen as a valiant attempt to ensure its finances are in good condition so it becomes easier to absorb the hit and funds don’t become an issue.
Railway officials anticipate annual energy savings of ₹5,000 crore following network electrification completion.
Indian Railways has allocated ₹1.28 lakh crore for staff costs in 2025-26, increased from ₹. 1.17 lakh crore in 2024-25. Moreover, ₹. 68,62.69 crore has been earmarked for the FY26 pension fund, up from ₹. 66,358.69 crore in FY25.
