1. Even as costs mount, Indian Railways reports generating ratio for 2016-17 at 97

Even as costs mount, Indian Railways reports generating ratio for 2016-17 at 97

The national transporter’s total ordinary working expenses stood at Rs 1,19,348 crore for FY17, against a target of Rs 1,21,000 crore.

By: | New Delhi | Published: April 19, 2017 6:45 AM
Indian Railways. (PTI)

Reeling under mounting costs, the Indian Railways has reported an operating ratio (OR) of 97 for 2016-17, against its revised target of 94.9, which was revised upwards from 92 earlier. However, if funds commensurate with demand were provided for essential replenishment of the railways’ physical assets such as tracks and rolling stock, the OR would have even crossed 100. OR indicates the amount of money spent to earn every `100 by an entity, the lower it the better. The OR for 2017-18 is fixed at 94.57.

The national transporter’s total ordinary working expenses stood at Rs 1,19,348 crore for FY17, against a target of Rs 1,21,000 crore. The amount for FY16 was `1,07,735 crore. The increase expenses could be attributed to the one-time burden of `30,000 crore borne by the railways on account of the 7th Pay Commission recommendations.

As reported by FE earlier, the gross traffic receipt (GTR) of the Indian Railways for FY17 stood at `1,65,068 crore compared with a revised target of `1,72,000 crore and `1,63,791 crore achieved in FY16. The passenger revenue is though up by `1,996 crore for the last financial year at `46,279 crore compared the previous year, it missed the target of Rs 48,000 crore for FY17.
Nevertheless, the freight earnings was down `4,899 crore in FY17 from its revised target of `1,08,900 crore and Rs 1,09,209 crore achieved in FY16.

It is noteworthy that this was the first year when the decades-old practice of presenting a separate Railway Budget was discontinued and was merged with the Union Budget. This means the railways will not have to pay dividend or the interest on capital-at-charge (mainly a loan in perpetuity from the government as gross budget support), starting this year.

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