While those getting the group upgrade will get a raise of around Rs 200, they will be additionally entitled to cars, houses, peons and all the perks associated with being a government babu, if they get 'gazetted officer' status.
A railway official said that around 62,000 employees are expected to benefit from the move.
The order issued on June 12 states that the mandate of the committee will be to examine in detail the issue of granting "Group B status (gazetted/non-gazetted)to various existing Group C posts of Indian Railways (including repercussions and modalities)".
It further said that the committee, consisting of executive directors from the pay commission and the Establishment and Transformation branches of the board as members, has to consult various stakeholders and submit its report in a month's time.
However, All India Railwaymen's Federation General Secretary Shiv Gopal Mishra expressed apprehension that the railways would make these posts non-gazetted and deny the employees additional pay and perks.
"The railway board doesn't want to do this and over the years they have only come up with excuses to say that how can we provide houses and other perks. But we kept saying that it is not about the perks, it is about giving an employee his due.
The number will come to around 62,000 if one includes those in the Rs 4,200 pay grade as well, he said.
Non-gazetted personnel in the Group B grade are senior employees, but they do not enjoy the perks and allowances associated with the gazetted officers in the grade. These include officers in the nine railway services.
"We don't want our men to just have the title of an officer but have no powers or privileges in reality," said Mishra, who is going to depose before the committee to highlight their demands.
Currently, the national transporter has around 10,000 gazetted officers.