1. Indian Railways improves operating ratio

Indian Railways improves operating ratio

In a significant financial achievement, Indian Railways has shown an improvement in its operating ratio (OR) at 91.3 per cent for the fiscal year 2014-15.

By: | Published: July 30, 2015 11:45 PM

In a significant financial achievement, Indian Railways has shown an improvement in its operating ratio (OR) at 91.3 per cent for the fiscal year 2014-15.

Provisional accounts indicate an OR of 91.3 per cent for Indian Railways, which is an improvement over the budgeted target of 92.5 per cent and also better than the revised estimate target of 91.8 per cent, a statement said.

OR suggests how much money is spent on day-to-day operations to earn revenue, giving an indication of the funds left for safety and expansion.

OR at 91 per cent means railways saves Rs 9 only from its operations while spending Rs 100. A lower figure for the OR is, therefore, regarded better and is indicative of better financial health.

Railways claimed that this is also an improvement over the OR for the preceding 2013-14 financial year, which had closed at 93.6 per cent.

Facing a cash crunch, railways has worked on a strategy to constantly improve its OR. It focussed on optimising revenues and ensuring economy in expenditure without compromising on allocations for safety, cleanliness, etc.

During 2014-15, passenger earnings grew at 15.5 per cent and goods earnings at 12.7 per cent over the previous period. Freight achieved net incremental loading of 42.9 million tonnes, totalling at 1,094.61 MT, it said.

Overall, railways earned Rs 17,758 crore more over the 2013-14 fiscal, it added.

Steps were also taken to keep expenditure within limits by adopting suitable measures. The ordinary working expenses, budgeted at a growth of 11.7 per cent in the revised estimates for 2014-15, actually closed at a lower figure of 8.6 per cent, the public transporter said.

The low rise in expenditure was a result of prudent and intensive expenditure management which saw a system being put in place for effecting economy and austerity in expenditure, it added.

The improvement in OR will enable railways to allocate more resources for developmental activities, particularly safety, passenger amenities, modernisation etc.

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