Indian Railways is likely to end this financial year with an operating ratio of 95 per cent and set a target to improve it to 93 per cent in the next fiscal.
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Operating ratio is the measure of money spent to earn every Rs 100; the lower the better.
This year’s operating ratio at 95 per cent is a marginal improvement over last year’s 96 per cent, as per the Revised Estimates of Budget 2018-19.
As per the sources, the upcoming Budget may also feature the announcement of a financial trajectory for Railways to bring down the operating ratio to a healthy 75 per cent in five years.
After the merger of the Rail Budget with the General Budget since 2017-18, Railways has stopped announcing its operating ratio numbers publicly, even though it i maintained internally.
The expenses—salaries, pension bill and other working expenditure— generally work out to be in the region of Rs 1.2 lakh crore from total earnings of around Rs 1.8 lakh crore, resulting in strain on the national transporter’s financials.
Expenditure and Financing
Railways is also expected to target a capital expenditure figure upwards of Rs 1.4 lakh crore– the highest ever– and an earnings estimate of over Rs 1.8 lakh crore
Commensurate with the huge plan size, most of which will be financed through borrowings and monetisation of assets.
Government laid emphasis on electrification of routes and renewal of tracks for safety. While the capital-intensive process of electrification will be funded mostly through institutional financing.
The safety upgrade, including renewal of over-aged assets will be funded through the Rashtriya Rail Sanraksha Kosh—Rs 20,000 crore per year for five years—set up in the previous Budget.
Railways contributed Rs 5,000 crore from its revenues as its share towards the fund. Rs 10,000 crore is supposed to come from its share of the Centre’s road fund built from diesel cess, while another Rs 5,000 crore is from the general revenues.
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