Rama Krishna Sangem
The central government has approved the productivity-linked bonus for railway employees, offering it as a Diwali gift. It is expected to benefit 10.9 lakh employees of Indian Railway. The government’s exchequer will bear the expenditure of Rs 1,866 crore for 2024-25. This bonus coming along with recent slash of GST on a range of essential and lower goods will trigger festive demand in the country.
This also will help the ruling BJP led NDA in the coming Bihar assembly elections as the state accounts for a good number of railways employees.
The bonus, extended to non-gazetted railway employees, is meant to recognise their contribution to the efficiency and performance of one of India’s most crucial transport networks. Last year, nearly 11 lakh employees received the payout, which not only boosted morale but also added to festive season spending across the country. A similar announcement this year is expected to have a comparable ripple effect.
The timing of the likely approval is significant as retailers and businesses are banking on stronger demand during the festival season, particularly in the wake of recent GST rate cuts on several categories of goods.
Boost to consumption
A bonus for railway employees, who form a large consumer base spread across urban and semi-urban India, could provide a direct push to household consumption. From durable goods and electronics to apparel and festive essentials, higher disposable income ahead of Diwali often translates into robust retail activity.
Economists note that festive-linked payouts such as these have a wider multiplier effect on the economy. With inflation moderating and policy incentives encouraging consumer spending, an additional inflow of cash in employees’ hands may help sustain demand momentum into the final quarter of the year. The government, too, is closely watching consumption trends as it seeks to balance fiscal prudence with growth.
If cleared, the Diwali bonus for railway staff will not only bring festive joy to lakhs of families but also provide a timely nudge to India’s consumption story at a moment when policymakers are keen to stimulate economic activity. PM Modi is aiming to boost demand at the domestic level so that the country can withstand the impact of US imposed higher tariffs.
