NEW DELHI: For the first time in last seven years, Indian Railways operating ratio has improved the target in 2014-15. The provisional accounts indicate an operating ratio of 91.3 percent which is an improvement over the budgeted target of 92.5 percent and also better than the revised estimate target of 91.8 percent.
According to railways, this is the first time in the last seven years that ration has improved the budget estimate target in a year. This is also an improvement over the Operating Ratio of preceding year 2013-14 which had closed at 93.6 percent.
Operating Ratio indicates how much railway spends to earn a rupee. An Operating Ratio of 91.3 percent means that Railway is spending 91.3 paisa to earn 100 paisa (one rupee). A lower figure of Operating Ratio is therefore regarded better and is indicative of better financial health of the system.
“The improvement in OR will enable the Railways to allocate more resources for their developmental activities particularly safety, passenger amenities and modernization among others,” said a senior railway officer.
The Railway Board worked on a strategy to constantly improve the Operating Ratio which meant focusing on optimizing of revenues and economy in expenditure without compromising on allocations for safety and cleanliness.
During 2014-15, passenger earnings grew at 15.5 percent and goods earnings at 12.7 percent over the previous period. Freight achieved net incremental loading of 42.9 MT totaling to 1094.61 MT. Overall, Indian Railways (IR) earned Rs 17,758 crore more over 2013-14.
On the freight side, coal with incremental contribution of 37.5 MT continued to be the biggest revenue earner for IR. Second highest incremental contribution of 5.2 MT was witnessed in the Export-Import Container category. In Passenger segment, the reserved class segment witnessed 6 percent growth contributing 61 percent to total passenger earnings.
Steps were also taken to keep the expenditure within limits by adopting suitable measures. The Ordinary Working expenses of IR, budgeted at a growth of 11.7 percent in RE 2014-15, actually closed at a lower figure of 8.6 percent. The low growth in expenditure was a result of prudent and intensive expenditure management by putting in a system of effecting economy and austerity in expenditure.
Railway has been banking upon extra budgetary support to complete its pending project. It is looking at extra budgetary monetary support of Rs 8.5 lakh crore during 2015-18 and the Life Insurance Corporation of Indian (LIC) has already pledged Rs 1.5 lakh crore in the next five years.
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