Implemented in 2016, the 10-year term of the 7th Pay Commission will end in January 2026.
Under the 7th Pay Commission, a 2.57 fitment factor raised the minimum basic salary from Rs 7,000 to Rs 17,990. Central trade unions are now demanding a 2.86 fitment factor, which officials estimate could push the Railways’ salary bill up by over 22%. Notably, Indian Railways has the largest workforce among all government departments in the country.Officials expect Rs 5,000 crore annual savings once railway network electrification is completed. There are no plans for short-term loans. By 2027–28, freight revenue is projected to rise by Rs 15,000 crore, helping absorb higher pay costs.For 2025–26, Railways has budgeted Rs 1.28 lakh crore for staff salaries, up Rs 11,000 crore from the previous year. Pension allocation for FY26 stands at Rs 68,602.69 crore, higher than Rs 66,358.69 crore in FY25.
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The 7th Pay Commission resulted in a 14–26% salary hike for railway employees. Implemented in 2016, its 10-year term will end in January 2026. According to an Economic Times report, Officials say Indian Railways is now focusing on cost-cutting and operational efficiency to ensure future pay revisions do not strain its finances.
