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New Delhi. Relief news has emerged for lakhs of retired railway employees across the country. Railway Board has issued instructions to speed up the process of giving the benefit of notional increment (notional annual salary increase) to the eligible employees retiring on June 30. After this decision, there will be an increase in the pension of eligible pensioners and they will also be able to get the benefit of arrears.

New instructions issued on July 16

The Railway Board has issued a new order to all zonal railways and production units on July 16, 2026, asking them to dispose of the pending cases quickly. The Board has clarified that the cases of those employees who have not yet received the benefit of notional increment should be investigated on priority basis and necessary action should be taken. Even before this, guidelines in this regard were issued in February 2026, but due to the process not being completed at many places, strict instructions had to be issued again.

What was the problem after all?

The annual increment of railway employees comes into effect on July 1 every year. In such a situation, the employees who retired from service on June 30 could not get the increment of July 1 due to technical reasons. This had a direct impact on their final salary calculation and pension. Many employees said that despite serving for the whole year, they have to suffer financial loss due to retirement only a day before.

Relief after Supreme Court’s decision

There was a long legal dispute on this issue. After this, on the basis of the decision of the Supreme Court and the relevant guidelines of the Central Government, the Railway Board decided to give the benefit of notional increment to the eligible employees. Under this arrangement, the annual increment of July 1 will be included in the calculation of pension of eligible employees who retire on June 30. With this, their revised pension will be higher than before.

What will the Railways do now?

Railway administration is preparing the list of all eligible employees. After this their Pension Payment Order (PPO) will be amended. After the release of the revised PPO, the increased pension will be applicable and the outstanding amount will also be paid as per the rules.

Railway Board gave clear instructions

Railway Board has asked all the zones to resolve the pending cases as soon as possible. The entire process should be completed within the stipulated time limit. Eligible pensioners should not have to visit offices unnecessarily. Unnecessary legal disputes should also be reduced by providing timely benefits.