Indian Railways registers worst operating ratio in 10 years

An operating ratio of 98.44 per cent means the Railways spent Rs 98.44 to earn Rs 100. 

Indian Railways registers worst operating ratio in 10 years

New Delhi: The Indian Railways recorded an operating ratio of 98.44 per cent in 2017-18, the worst in the last 10 years, said the Comptroller and Auditor General (CAG) in its report tabled in Parliament on Monday.

"Since 2016-17, the revenue surplus has been falling, which is indicative of failing financial health of Indian Railways," the national auditor said. During 2017-18, the net revenue surplus decreased by 66.10 per cent from Rs 4,913.00 crore in 2016-17 to Rs 1,665.61 crore, it added.

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"The factors mainly attributable to meagre surplus were increase in working expenses (8.14 per cent) and negative growth rate of sundry earnings (16.20 per cent). Staff cost, including pension payments, constituted the bulk of working expenses," it said.

"The steadily declining performance of railways is reflected in the operating ratio (OR) of 98.44 per cent, the worst in the last 10 years," the CAG report stated. The national transporter would, in fact, have ended up with a negative balance of Rs 5,676.29 crore instead of surplus of Rs 1,665.61 crore, but for the advance received from NTPC and IRCON, it said.

According to the railway officials, the operating ratio is a measure of expenditure against revenue and it shows how efficiently the national transporter is operating and how healthy its finances are.

An operating ratio of 98.44 per cent means the Railways spent Rs 98.44 to earn Rs 100. 

The CAG also highlighted that the share of internal resources in total capital expenditure, which was as high as 26.14 per cent in 2014-15, decreased to 3.01 per cent in 2017-18.

"Decline in generation of internal resources resulted in greater dependence on the gross budgetary support and the extra budgetary resources (EBR). With depleting surplus, the Railways is leaning heavily on the central government and on EBR for meeting its capital expenditure. An increased reliance on borrowings will further exacerbate its grave financial situation," the CAG report said.