Union minister Ashwini Vaishnaw announced the decision, describing the payout as a Diwali gift for the beneficiaries.
ET had reported earlier this morning, citing people in the know, that the Union Cabinet was likely to take up a proposal on productivity-linked bonus (PLB) for railway employees.
The annual bonus is paid to eligible non-gazetted railway employees. The existing bonus amount is Rs 17,951, calculated on the basis of a wage ceiling of Rs 7,000 and 78 days of wages. The ceiling has remained unchanged since 2014-15.
What railway employees currently get
The existing PLB calculation uses a wage ceiling of Rs 7,000 and a period of 78 days, resulting in a bonus of Rs 17,951 for non-gazetted railway employees.
The Indian Railways Technical Supervisors’ Association (IRTSA) has sought an increase in the ceiling to Rs 18,000 plus dearness allowance (DA) for Level-2 employees and above, proportionate to their higher pay levels.
The association has argued that the existing ceiling needs revision, pointing to a minimum wage of Rs 21,000 for unskilled workers. Based on a ceiling of Rs 18,000, it has recommended raising the annual bonus to at least Rs 46,184.
Railway Board warns against fake bonus letter
The decision comes days after the Railway Board warned against a forged letter circulating on social media that purported to announce the sanction of a 78-day PLB for the 2025-26 financial year.
The fabricated letter, dated October 6, claimed that the government had approved a payment of Rs 41,149. In a communication to railway general managers dated October 7, the board said the document carried a forged signature and had not been issued by it.
The board directed railway offices not to act on the document or make payments based on it. It also advised officials and employees to verify bonus-related communications through the official Railway Board or Ministry of Railways websites.