Indian Railways plans to improve its operating ratio soon

The Indian Railways, which saw suspension of its passenger, mail and express trains for the first time in its history due to the Covid pandemic, is now hopeful to improve its operating ratio, or the balance between expenditure and revenue, in next few months, officials said on Friday.

According to the railway officials, the operating ratio shows how efficiently the national transporter is operating and how healthy its finances are.

The Comptroller and Auditor General (CAG), in its report tabled in Parliament in December 2019, had said that the railways recorded an operating ratio of 98.44 per cent in 2017-18, the worst in the last 10 years. Even last year, the CAG, in its report. slammed the railways saying that it had resorted to "window dressing" to present its operating ratio in a better light during financial year 2018-19 by including advance freight payment in its calculations.

A senior Railway Ministry official, wishing not to be named, told IANS: "There are few things that have already taken place in Indian Railways. One is massive reduction in our expenditure as we have done optimisation of resources."

Noting that the national transporter is likely to save around Rs 18,000 crore from this, he also said that the Indian Railways has also taken other optimisation of other resources like reducing the fuel costs.

"We used to spend a lot of amount on fuel, which has come down drastically, thus making more saving for the railways," he said.


Citing the growth in the freight business, the official said that railways has also done very good in freight services. "Extraordinary freight performance has made a difference, as earning has increased in the freight," he said.

The railway official said that despite the passenger, mail and express trains not operating during the nationwide lockdown, the freight business has helped the railways to absorb the losses that has happened.

The railways suspended the mail, express and passenger train services in the wake of Covid-19 pandemic. Till date, the railways is operating just over 60 per cent of its total mail, express and passenger services across the country.


The official said that they were "hopeful to improve the operating ratio to 95 and 96 per cent in next coming months".

Asked about the pension liability, the official said that since railway is a earning undertaking, there is nowhere in the world where pension payment is taken as a working expenses. "But this was happening here, but somehow we were managing. And now we have taken an arrangement where some kind of finances have been taken from Ministry of Finance, which we will be paying back within one or two years," he said.

Another railway official said that the pension liability was budgeted at Rs 53,160 crore in the beginning of the current fiscal. However, the revised estimate stood at Rs 523 crore as the national transporter made an arrangement with the Finance Ministry to defer this expense.


With railways getting the highest-ever total plan capex at Rs 2.15 lakh crore, Railway Board Chairman and CEO Suneet Sharma on Monday had described the Union Budget 2021-22 as a "transformational" budget for the national transporter and one which has focus on deliverance.

Sharma said the focus of this budget is on deliverance, commitment to delivery, time schedule, focus on customers, focus on technology, induction to provide better services to customers, better passenger and freight services.

On the details of the Budget announced by Union Finance Minister Nirmala Sitharaman in Lok Sabha, he said: "Indian Railways has now highest ever total Plan capex of Rs 2,15,058 crore this year with Rs 7,500 crore from internal resources, Rs 1,00,258 crore from extra budgetary resources and Rs 1,07,100 crore for capital expenditure allocation given in the general budget."

He said that the railways received a record outlay of Rs 1,10,055 crore, of which Rs 1,07,100 crore is for capital expenditure. - IANS