8th Pay Commission: Productivity-linked Bonus changes for non-gazetted Railway employees; key demands explained

For non-gazetted employees of Indian Railways, the annual Productivity Linked Bonus (PLB) remains same every year since 2016 even when the Railways earn more. The Indian Railways Technical Supervisors' Association (IRTSA) took this issue to the 8th Central Pay Commission (CPC) through its memorandum.

“The PLB scheme for Railway employees came in to force from the year 1979. From the year 1995-96, all Group ‘C’ and Group ‘D’ employees were paid PLB without any ceiling on wages for eligibility,” IRTSA said.

Under this scheme, productivity was to be measured “by the net tonne KM for goods revenue traffic and passenger KM equated to goods traffic,” according to the memorandum.

However, the no-ceiling era ended a decade ago. “Ceiling of monthly emoluments for the purpose of payment of PLB was fixed as ₹7000 (Basic Pay + DA) from the financial year 2014-15 vide Railway Board letter No. RBE No.109/2016 dated 15.09.2016. It remains same till date with same PLB amount of ₹17,951 for continuous ten years,” IRTSA said.

Contrast with pay levels

“Entry pay for lowest grade of Pay Level-1 in Railways was fixed as ₹18,000 w.e.f. 01.01.2016. PLB equivalent to 78-day wages calculated on the basis of wage ceiling of ₹7000 with the maximum admissible PLB of ₹17,951 sounds irrational,” IRTSA said.

Key issues

IRTSA's memorandum to 8th CPC has highlighted out five key issues with PLB:

First, the ceiling was never aligned to the 7th CPC: “Monthly wages ceiling for PLB was not revised from ₹7000 to ₹18,000 after implementation of 7th CPC recommendations w.e.f. 01.01.2016. Ceiling of ₹7000 remains same for ten years.”

Second, the amount has frozen. “The PLB amount of ₹17,951 has not increased for the past ten years, ignoring even inflation. Since implementation of 7th CPC pay matrix, rate of DA increased to 60% up to January 2026. PLB should have been increased by ₹10,770 at least in proportion to DA increase since 2016”.

Third, IRTSA said, “Last year PLB equivalent for 78 days wages were announced. But, ₹17,951 paid as PLB was not in proportion to 78 days wages. PLB paid per day worked out to be ₹230 (₹17,951/78 days), whereas minimum pay per day for starting basic pay of ₹18,000 in level-1 plus 60% DA is ₹960.”

The remaining issues highlighted by IRTSA range from fairness across grades and to the scheme's own logic.

“PLB calculation gives no weightage for employees working in Pay Level 2 and above, shouldering higher responsibilities for improving productivity,” it noted, adding that “improvements in the productivity of goods and passenger traffic not reflected in the PLB paid to employees.”

According to the memorandum, the Railways' own numbers make their point: “Gross traffic receipt of IR has increased by 5.1% from ₹2,64,600 crore in 2023-24 to ₹2,78,100 crore in 2024-25,” yet this “is not being reflected in real value of PLB paid to employees.”

Two demands

IRTSA has made two simple demands:

First, for the lowest rung:

“The ceiling limit for Pay Level-1 employees for the purpose of PLB should be revised to pay fixed by 8th CPC plus Dearness Allowance (DA).”

Second, for the rest:

“The ceiling limit of PLB should be removed for employees working in level-2 and above and the calculation of PLB should be linked to Pay level the employees are working.”