The Railways will pay Productivity Linked Bonus (PLB) equivalent to 78 days' wages to its non-gazetted employees for the year 2010-11.

The Union Cabinet cleared the proposal, which would benefit about 12.61 lakh employees and entail an expenditure of Rs.1,098.58 crore. The payment would be made before Dussehra.

The Cabinet maintained that the highest-ever PLB was being paid based on productivity indices, reflecting the performance of the Railways.

This payment of bonus comes in the wake of the Railways' move to garner a loan of Rs. 2,000 crore from the Union Finance Ministry to help tide over its financial problems. Officials however denied that the loan was being sought to make the bonus payment, emphasising that the bonus was a budgetary provision.

The modalities are being worked out for the short-term loan to initiate development work which had been hampered on account of a bad balance sheet. Officials said the situation would ease further once the Railway Finance Corporation issued bonds for Rs.10,000 crore.

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