7th Pay Commission hike: Additional salary burden of Rs 28,450 crore for railways

The Indian railways will have to bear an additional financial burden of Rs 28,450 crore towards its salary bill due to implementation of 7th pay commission recommendations, approved by the government on Wednesday .

The government sees an impact of Rs 24, 325 crore in the current year, including the arrears, as allowances will be available retrospectively. Railways currently employees over 13 lakh people.

“All this was taken account during the preparation of the budget in February . We'll be able to manage it on our own," a senior railway official told ET.

The national transporter expects that its savings from energy bill and increased freight, passenger and non fare revenue would help it bite the pay commission bullet.

“We'll save at least Rs 5,000 crore on our diesel and energy bill. Then we'll be doing 50 Million tonne more freight loading in FY 17. We are expecting an increase of around Rs 16,000 crore in our traffic receipts in the current fiscal," the official added.

Railways also estimates that its non fare revenue would go up by Rs 7,000 crore from the current Rs 3,000 crore. Non fare revenue in` cludes income from commercial exploitation of railways like advertising and land monetisation.

“Passenger revenue will grow at 12%. We are putting up 20,000 huge screens at stations. Some of the land would be leased out. All of it would lead to jump in revenue," the official said.

Railway is also increasing its freight basket currently dominated by coal and steel. “We are launching special schemes for transportation of auto, foodgrain, chemical, fodder, jute and oil," an official from the railway traffic department said.

The national transporter will see its wage bill go up to Rs 70,700 crore for FY 17 and pension outgo will be Rs 45,000 crore. Railway is currently not accounting another Rs 7,450 crore that it has to pay in allowances as a part of the pay commission.

For the current financial year, railway minister Suresh Prabhu has set the operating ratio, the amount railway spends to earn 100 rupees, at 92%, almost 2% higher than the last year's operating ratio (OR).

The total revenue receipt expected for the current financial year is Rs 1,84,820 crore. Passenger earnings have been kept at Rs 51,012 crore. Freight loading target has been set at 1157 million tonne and earnings have been estimated at Rs 1,17,933 crore. Other earnings have been estimated at Rs 15,775 crore.

Unions to go on strike Unhappy with the 7th pay commission hike, railway unions across country are planning to go on indefinite strike from July 11.“it's a meagre increase in salary for the lowest grade as the take home salary has just gone up by Rs 1500. None of our recommendations have been accepted. We have called for an indefinite strike," SG Mishra, General Secretary, AllIndia Railwaymen's Federation (AIRF) told ET.