IRTSA Memorandum for Restoration of PCO Allowance for SSEs upgraded to level-8 and level-9 (non-functional) working in PCO wing of Production Units and Workshops
INDIAN RAILWAYS TECHNICAL SUPERVISORS’ ASSOCIATION
No:IRTSA/Memo-41
Date:22.08.2026
Director General (HR)
Railway Board
Respected Sir,
Subject: Restoration of PCO Allowance for SSEs upgraded to level-8 and level-9 (non-functional) working in PCO wing of Production Units and Workshops.
Ref: 1) Railway Board letter RBE No.155/2022, dated 17.11.2022.
2) Railway Board letter No PC-VI1/2023/1/71518, dated 06.11.2025.
3) DG HR D.O. No.PC/VII/2023/1/7/5/8, dated 22.05.2025.
4) DoE E.II(B) Section OM No. 9/7/2025-E.ll(B), dated 08.08.2025.
5) CRB D.O. No. No.PC/Vll/2023/1/7/5/8, dated 23.03.2026.
6) DoE E.II(B) Section OM No. 9/7/2025-E.ll(B), dated 08.08.2026.
1.1) We would like to draw your kind attention on discontinuance of PCO allowance to Senior Section Engineers (SSEs) working in PCO wing of Production Units and Workshops of Indian Railways covered under incentive scheme. Railway Board’s proposal for restoration of PCO Allowance for SSEs received upgradation to level-8 and level-9 (NFU) vide RBE No.155/2022 have not agreed by Finance Ministry.
1.2) As on 01.12.2022, Approximately 2271 SSEs in level-8 (24% in level-7, 50% in level-8(MACPS) 26% in level-9 MACPS) are working in PCO organisation of Production Units and Workshops which are covered under Incentive System. (Details in Annexure-1). It is requested that action may be initiated by Railway Board for reconsideration of the decision taken by DoE, Ministry of Finance on this issue.
2) Incentive system
a) Railway Production Units and Workshops are following performance-based incentive system to get higher productivity and for economic utilisation of Rolling Stocks & assets as well that for the man power. Systematic study of all the operations & process was carried out to set up norms & standards. Bench mark/Time standard for every activity resulted in optimising staff strength and infrastructure utilisation of PUs and workshops. Seamless adoption of new technologies in manufacturing & maintenance process and induction of new rolling stocks are happening continuously. During implementation of incentive system staff strength in PUs and Workshops were streamlined and downsized resulting in achieving in higher efficiency.
b) During every revision of incentive rates, to achieve more productivity downward revision of allowed time (man power bench mark) had been done. Due to the effect of two revisions, Strength of workshop staff was reduced by 18% down from 5,02,582 to 4,13,767 between the year 1999 and 2009. In the year 2017 the strength was further reduced by 15% to 3,51,780. In the same period number of rolling stocks produced and major overhaul done were increased considerably. Increase in number of Rolling stocks between the year 2014-15 and 2024-25 is given in Annexure-2.
c) During the incentive revision in the year 1999, 12.5% reduction in fatigue allowances and 2.5% in contingency allowance were made and during the revision in the year 2009, 5% reduction in allowed time across the board implemented to achieve productivity. But staff strength of workshop was reduced by 30% from 1999 to 2017. Similarly, when the incentive rates were revised in the year 2017, 5% reduction in allowed time across the board was implemented. This has resulted in reduction in man power more than 5%, multiple times higher than actual financial value of revision of incentive.
2.1) Production Control Organisation Allowance (PCO Allowance) part of incentive system
a) Production Control Organisation (PCO) consists of planning, inspection and progress and they form the nerve system of production and maintenance activities. When staff working directly in shop floor are required to work in these wings through parallel transfer, they are granted PCO allowance. Staff working in shop floor and PCO organisation are inter changeable on administrative convenience.
b) Railway Board letter No.E(NG) l-78SR6/44 dated 09.06.1978 stated principle for staff working in PCO organisation,
“if staff from the shop floor are posted to the Production Control Organisation (Progress, Inspection, Rate fixing and planning, Jig & Tool) in their existing scale of pay they will receive a special pay of 10% of the pay admissible to them in their posts in shop floor”.
2.2) PCO Allowance (Special Allowance) for SSE & SE:
a) Railway Board through their letter No. PC-V No.205 (RBE No. 193/1999, dated 10.08.1999 on the subject, Recommendation of Fifth Central Pay Commission – “Decision relating to grant of PCO Allowance (known as special pay prior to IV CPC recommendations) to staff of Production Control Organisation” said that Senior Section Engineers and Section Engineers posted to Production Control Organisation on tenure basis will be eligible for a Special Allowance calculated at 7.5% of their basic pay w.e.f 01.09.1999.
b) Through Railway Board letter No. E(P&A)l-2008/SP-1/WS-4, Dated 06.02.2009, pursuant to the recommendations of the Sixth CPC, Section Engineers and Senior Section Engineers drawing grade pay of Rs.4600 were granted PCO Allowance of 7.5%.
c) 7th CPC in para 8.17.102, without studying details on the principles of Incentive system followed in PUs and workshops of Indian Railways, in line with its general approach of rationalizing the percentage-based allowances by a factor of 0.8, revised the rates of PCO allowance for SSE in level- 7 to 6% (7.5%X0.8=6%) of basic pay.
3) Implementation of RBE No.155/2022 for upgradation of SSEs to level-8 & NFU to level-9
a) In certain Group-C categories like Technical Supervisors, new grade of Pay Level-8 has been introduced w.e.f. 01.12.2022 to mitigate stagnation among these categories {71h CPC in para 11.40.113 said that there is some element of stagnation at the GP-4600 (SSE) stage and asked Railways to address the issue departmentally). They will be eligible for non-functional financial upgradation to Pay level-9 on completion of four-year service in Pay level-8.
b) There is no change in the nomenclature/designation, duties and responsibilities and classification of the posts after upgradation and they will remain classified as Group ‘C’.
c) Entire scheme of upgradation was made financially neutral proposition.
3.1) It is to be noted that, even though matching surrender for the purpose of financial neutrality was done for entire upgraded posts, only around 15% of SSEs upgraded to level-8 from level-7 got the benefit of pay fixation, since all other were already placed in level-8 and level-9 through MACPS.
3.2) It is pertinent to note that SSEs working in functional level-7, got the financial upgradation under MACPS to level-8 and 9 are eligible for PCO allowance.
4) Allowances are paid to any particular category based on their nature of work and as per requirements for train operation & maintenance in open line, major maintenance in workshops, manufacturing activities in Production units, etc.
5) Eligibility for certain allowances like Night Duty Allowance (NOA), National Holiday Allowance (NHA) and Production Control Organisation allowance (PCO Allowance) are paid to all Group-C employees irrespective of their pay level, if they are posted I rostered for the respective work. These allowances are paid as per accepted recommendations of various pay commissions and expert bodies.
6) Railway Board vide its letter dated 06.11.2025, withdrawn payment of PCO allowance for SSEs in level-8 who are working in progress wing of Production Unit and Mechanical Workshops and Cessation of NOA, NHA and PCO allowance for personnel receiving non-functional upgradation to level-9 after 4 years of service in level-8. It put employees received upgradation I promotion to level- 8 and employees going to receive non-functional financial upgradation to level-9 in a disadvantageous position since their effective take home pay will get reduced. (Illustration in Annexure-3).
7) Government has already formed 8th CPC and it is functioning full-fledged. 8th CPC has been mandated to review the existing allowances and conditions of their admissibility and recommend their rationalization keeping in view the multiplicity of allowances. Now, it is not appropriate for Railways to withdraw existing allowances to particular category of staff who falls under safety category.
8) Hence it is requested for restoration of PCO Allowance for SSEs upgraded to level-8 and level-9 (non-functional upgradation) working in PCO wing of Production Units and Workshops. It is requested that action may please be initiated by Railway Board for reconsideration of the decision taken by DoE, Ministry of Finance on this issue.
Thank you in anticipation
Yours’ truly.
V.RAMESH
General Secretary, IRTSA
Copy for kind information –
AM (Staff)
Annexure-1
Approximate Strength of SSEs (level-8) working in PCO organisation eligible for PCO allowance Production Units
| S.N | Production Units | Strength of SSE in level-8 | Remarks |
| 1 | CLW | 110 | Approximate. |
| 2 | BLW | 56 | As per write petition No. 1184/2025 at Hon’ble CAT Allahabad. |
| 3 | ICF | 130 | Actual on roll. |
| 4 | RCF | 33 | Book of sanction 66 as on 31.03.2018. Taken 50% of 66. |
| 5 | MCF | Nil | No incentive system. |
| 6 | PLW | Nil | |
| 7 | RWF | 13 | Actual on roll. |
| Sub Total | 342 |
Mechanical Workshops
| S.N | ZONE | MECHANICAL WORKSHOP | On roll strength of SSE in level- 8 (Appx) | Remarks | |
| 1 | Central | Parel | Loco workshop | 24 | 50% of 47 SSEs ‘On roll’ as on 31.03.2018 |
| 2 | Matunga | Carriage workshop | 25 | No separate sanction for PCO. 20% of on roll strength of 247 = 50 SSE taken for PCO. 50% of 50 SSEs accounted in level-8. | |
| 3 | Kurduwadi | NG workshop | Nil | No incentive system | |
| 4 | Eastern | Jamalpur | Loco workshop | 26 | In proportion to Liluah WS |
| 5 | Liluah | C & W workshop | 40 | Arrived from total SSE ‘on roll’ strength of 388 as done in S.N.2 | |
| 6 | Kanchapara | Group of workshops | 27 | 50% of 53 SSEs ‘On roll’ as on 31.03.2018 | |
| 7 | Budge Budge | Bogie manufacture factory | Nil | ||
| 8 | East Central | Samastipur | Mechanical workshop | 10 | Approximate |
| 9 | Harnaut | Nil | |||
| 10 | East Coast | Mancheswar | Carriage workshop | Nil | PCO is part of Group Incentive System |
| 11 | Northern | Charbagh | Loco workshop | 15 | 50% of 30 SSEs ‘BOS’ as on 31.03.2018 |
| 12 | Alambagh | C & W workshop | 3 | 50% of 6 SSEs ‘On roll’ as on 31.03.2018. | |
| 13 | Amristar | Mechanical workshop | Nil | Zero SSE ‘on roll’ as on 31.03.2018 | |
| 14 | Jagadhri | C & W workshop | 20 | Arrived from total SSE on roll strength of 196 as done in S.N.2 | |
| 15 | Kalka | C & W workshop | 3 | 50% of 5 SSEs ‘On roll’ as on 31.03.2018 | |
| 16 | North Central | Gwalior | Rail Spring Karkhana | Nil | No incentive system |
| 17 | Jhansi | Wagon workshop | 13 | 50% of 26 SSEs ‘On roll’ as on 31.03.2018. | |
| 18 | North Eastern | Gorakhpur | Mechanical workshop | 13 | 50% of 25 SSEs ‘On roll’ as on 31.03.2018. |
| 19 | lzatnagar | Mechanical workshop | 8 | 50% of 15 SSEs ‘On roll’ as on 31.03.2018. | |
| 20 | North East Frontier | Dibrugarh | Mechanical workshop | 6 | Equal to New Bongaigaon |
| 21 | New Bongaigaon | C & W workshop | 6 | 50% of 12 SSEs ‘On roll’ as on 31.03.2018. | |
| 22 | Tindharia | NG workshop | Nil | ||
| 23 | North Western | Ajmer | C & W workshop | 28 | |
| Ajmer | Loco workshop | 50% of 55 SSEs ‘On roll’ as on 31.03.2018. | |||
| 24 | Bikaner | C & W workshop | 8 | Half of Jodhpur workshop | |
| 25 | Jodhpur | Carriage workshop | 16 | 50% of 32 SSEs ‘On roll’ as on 31.03.2018. | |
| 26 | Southern | Perambur | C & W workshop | 3 | 50% of 5 SSEs ‘On roll’ as on 31.03.2018. |
| 27 | Perambur | Loco workshop | 5 | 50% of 9 SSEs ‘On roll’ as on31.03.2018. | |
| 28 | Trichy | Golden Rock central workshop | 1 | 1 SSE ‘On roll’ as on 31.03.2018. | |
| 29 | South Central | Lallaguda | Carriage workshop | 15 | 50% of 30 SSEs ‘On roll’ as on 31.03.2018. |
| 30 | Guntupalli | Wagon workshop | Nil | PCO is part of Group Incentive Svstem. | |
| 31 | Tirupati | Carriage workshop | Nil | PCO is part of Group Incentive System | |
| 32 | South Eastern | Kharagpur | Loco, Carriage & Wagon workshop | 14 | 50% of 28 SSEs ‘On roll’ as on 31.03.2018. |
| 33 | Haldia | DEMU manufacturing | Nil | ||
| 34 | South East Central | Nagpur | NG workshop | Nil | |
| 35 | Raipur | Wagon workshop | 7 | 50% of 14 SSEs ‘On roll’ as on 31.03.2018. | |
| 36 | South Western | Mysuru | Central workshop | 12 | Arrived from total SSE on roll strenqth of 119 as done in S.N.2 |
| 37 | Hubli | Carriage workshop | 10 | 50% of 20 SSEs ‘On roll’ as on 31.03.2018. | |
| 38 | Western | Dahod | C & W workshop | 20 | 50% of 40 SSEs ‘On roll’ as on 31.03.2018. |
| 39 | Lower Parel | Carriage workshop | 27 | 50% of 53 SSEs ‘On roll’ as on 31.03.2018. | |
| 40 | Mahalaxmi | EMU workshop | 3 | Approximate | |
| 41 | Pratapnagar | C & W workshop | 5 | 50% of 9 SSEs ‘On roll’ as on 31.03.2018. | |
| 42 | Bhavnagar | Wagon workshop | Nil | No incentive system | |
| 43 | West Central | Kota | Wagon workshop | 17 | 50% of 34 SSEs ‘On roll’ as on 31.03.2018. |
| 44 | Bhopal | Coach Rehabilitation Workshop | 9 | 50% of 18 SSEs ‘On roll’ as on31.03.2018. | |
| Sub total | 1924 | ||||
S&T workshops
| S.N | ZONE | S&T WORKSHOP | On roll strength of SSE in level-8 (APPX) | Remarks |
| 1 | SCR | Mettuquda | 1 | 50% of 2 SSEs ‘On roll’ as on 31.03.2018. |
| 2 | SR | Podanur | Nil | |
| 3 | NR | Gaziabad | 4 | 50% of 7 SSEs ‘On roll’ as on 31.03.2018. |
| 4 | WR | Bvculla | Nil | No incentive system |
| 5 | WR | Sabarmati | Nil | No incentive system |
| 6 | ER | Howrah | Nil | No incentive system |
| 7 | NER | Gorakpur | Nil | No incentive system |
| Sub total | 5 |
Engineering Workshops: No incentive system followed in 10 Engineering workshops.
| 1 | CR | Manmad |
| 2 | WR | Sabarmati |
| 3 | SR | Arakkonam |
| 4 | NR | Lucknow |
| 5 | NR | Jalandar Cant |
| 6 | NER | Gorakpur Cant |
| 7 | NFR | New Bongaigaon |
| 8 | ECR | Mughalsarai |
| 9 | SER | Sini |
| 10 | SCR | Lallaguda |
Grand total on SSEs (level-8) working in PCO organisation in Indian Railways = 2271
Number of SSEs working in PCO organisation receiving PCO Allowance as on 01.12.2022 while implementation of Railways 50% upgradation ordervide RBENo.155/2022, in ICF
| Pay level | Number of SSEs | % to total | BeforeRBE No 155/2022 | BeforeRBE No 155/2022 |
| Level-7 | 31 | 24% | 6% PCO allowance | 6% PCO allowance |
| Level-8 (MACPS) | 65 | 50% | 6% PCO allowance | Nil |
| Level-9 (MACPS) | 34 | 26.% | 6% PCO allowance | Nil |
| Total | 130 | 100.0% | ||
| After implementation of upgradation to level-8, 99 SSEs (76%) who were already in level-8 and level-9 through MACPS were denied PCO allowance w.e.f. 01.09.2025. | ||||
By applying ICF’s proposition for Indian Railways, 76% of approximately 2271 SSEs working in PCO wing receiving PCO allowance were deprived of PCO allowance after upgraded to functional pay level-8, Since their basic pay remains same.
Annexure-2
Increase in number of Rolling stocks between the year 2014-15 and 2024-25
| 2014-15 | 2024-25 | % increase | |
| Number of Locos | 10,773 | 16,092 | 49.4 % |
| Number of Coaches | 68,588 | 98,173 | 43.1 % |
| Number of wagons | 2,54,006 | 3,46,366 | 36.4 % |
| Number of passenger trains run daily | 13,098 | 13,940 | 6.4 % |
| Passenger Train KM (in Million) | 759.3 | 835 | 10.0 % |
| Number of Goods trains run daily | 9202 | 11631 | 26.4 % |
| Goods Train KM (in Million) | 401.9 | 520 | 29.4 % |
Annexure-3
Employee receiving functional promotion from level-7 to level-8 and non-functional promotion from level-8 to level-9 with pay fixation benefit
| Level-7 | Level-8 Functional | Level-9 Non functional | |||
| With PCOallowance | With out PCOallowance | With PCOallowance | With out PCOallowance | ||
| Basic pay | 58,600 | 60,400 | 60,400 | 62200 | 62200 |
| DA® 60% | 35160 | 36400 | 36400 | 37320 | 37320 |
| PCO allowance (@ 6% | 3516 | 3,624 | 0 | 3732 | 0 |
| Total | 97,276 | 1,00,424 | 96,800 | 1,03,252 | 99,520 |
Proportionate increase of Dearness Allowance (DA) and Transport Allowance (TPTA) during promotion or MACPS to higher pay level, cannot be considered as compensation for denial of PCO allowance.
Proportionate increase in DAandTPTA during promotion or MACPS is available for all employees. These increases should not be related with denying any other allowances.
Employee in functional level-7, already reached level-8 through MACPS, upgaraded to Level-8 functional without pay fi1xafion benefit
| Level-8 MACPS | After upgradation to level-8 Functional | |
| Basic pav | 62200 | 62200 |
| DA@ 60% | 37320 | 37320 |
| PCO allowance @ 6% | 3732 | 0 |
| Total | 1,03,252 | 99,520 |
Employee in functional level-7, already reached pay level-8 & 9 through MACPS are put still more in disadvantageous position, since their basic pay do not change.
****
COMMENTS