Cabinet approves Productivity Linked Bonus to Railway Employees for the financial year

Cabinet Approves Productivity Linked Bonus for Railway Employees

All eligible non-gazetted Railway employees (excluding RPF/RPSF personnel) are in for some good news! The Union Cabinet, headed by none other than the esteemed Prime Minister Shri Narendra Modi, has given the green light to the Productivity Linked Bonus (PLB). This bonus, which is equivalent to 78 days’ wages, has been approved for the financial year 2020-21.

Cabinet approves Productivity Linked Bonus to railway employees for the financial year 2020-21

The payment of 78 days’ PLB to railway employees is estimated to have a financial impact of Rs.1984.73 crore. The ceiling for wage calculation, in case of payment of PLB to eligible non-gazetted railway employees, is Rs.7000/- per month. An eligible railway employee can receive a maximum amount of Rs. 17,951 for the 78-day period.

Around 1.156 million non-gazetted employees of the Railway industry are poised to reap the rewards of this resolution. The disbursement of PLB to qualified railway employees is a regular occurrence, setting the tone for Dusshera/Puja holidays each year. The Cabinet’s verdict will be executed promptly, in time for this year’s festivities.

A payment equivalent to 78 days’ wages, known as PLB, has been disbursed for the financial years spanning from 2010-11 to 2019-20. Additionally, it has been announced that an equivalent amount will also be paid for the year 2020-21 in order to motivate the railway employees to work harder and improve the overall performance of the organization.

Railway employees, excluding RPF/RPSF personnel, who are stationed throughout the country, are eligible for the Productivity Linked Bonus on Railway. This bonus is applicable to all non-gazetted employees and is designed to increase productivity.

Here’s how you can calculate PLB:

• Firstly, the PLB payment has been made in compliance with the Cabinet’s approved formula, which was implemented during their meeting on 23rd September 2000. This formula was used for calculating PLB from the period of 1998-99 to 2013-14, with slight alterations made to the Capital Weightage and Staff Strength during 2002-03 to 2004-05.
• The formula was input-output based, where the output was measured in terms of equated net tonne-kilometers, while the input was measured by the non-gazetted staff strength (excluding RPF/RPSF personnel) modified by Capital Weightage.
• Secondly, for the financial year 2012-13, a special case was approved, and PLB for 78 days was granted with the condition that the formula for PLB would be reviewed in light of the Sixth CPC’s recommendations and the views of the Ministry of Finance. As a result, the Ministry of Railways constituted a committee to develop a new formula.
• Thirdly, the committee recommended that weightage should be given to both the formula of 2000 and the new formula based on Operation Ratio (OR) in the ratio of 50:50. This formula ensured an equal representation of productivity in terms of physical parameters as well as financial parameters. The formula recommended by the committee has been used for calculating PLB from 2014-15 to 2019-20.

Railways, the very first departmental undertaking of the Indian Government, brought in the concept of PLB in 1979-80. The primary objective behind this initiative was to acknowledge the crucial role played by Railways as an infrastructural support system in the overall economic performance. As part of the larger scheme of Railway operations, it was deemed necessary to introduce PLB in place of Bonus, based on the principles of “The Payment of Bonus Act -1965”. Even though the Railways were not under the purview of this Act, the broad principles were used to outline the “Wage/Pay Ceiling”, and “Salary/Wage” definition. The PLB Scheme for Railways was implemented in 1979-80 after consultation with the two recognized Federations – All India Railwaymen’s Federation and National Federation of Indian Railwaymen – and with the Cabinet’s approval. The scheme is reviewed every three years.

Source: PIB