Railways seeks Rs 32k cr for 7th pay panel

Railway Minister Suresh Prabhu has written to Finance Minister Arun Jaitley seeking Rs 32,000 crore during the next three to four years for implementing the seventh pay commission recommendations.

Railways bear over 35 per cent of the amount spent on pay and allowances of the total Central government employees.  Prabhu has pointed that this is more than one-third of the burden to be caused by implementing the commission’s recommendations.

Implementation of pay commission will annually increase the liability of the Railways by Rs 28 crore. Prabhu has also assured the finance minister that the Railways would be able to absorb the burden in the next three to four years.

He has also indicated that passenger fares could be adjusted and the railways would be taking other measures. However, Prabhu has ruled out increase in freight rates and argued that there is no room for it.

“The first factor of freight earnings originating at loading is demand driven and is largely not within the control of the Railways. The second factor that is freight rates, though is within Railways competence, there is hardly any headroom available for increasing the same without affecting competitiveness adversely,” he said, pointing out to the Railway’s competition with the road transport sector.

He has also said that increase in freight rate would also adversely impact the national economy by affecting the cost of transportation of coal, cement and foodgrain.  
Prabhu has pointed how it is difficult for railways to cut its cost.  “While we have put in place serious cost-cutting measures and are focusing on fuel management,” he said.