Railway Budget 2018: FM Arun Jaitley is all set to present the Union Budget 2018 on February 1, of which Railway Budget is now a part. Indian Railways, led by Railway Minister Piyush Goyal, is looking forward to key announcements in Budget 2018. The 92-year old tradition of holding a separate Railway Budget was eliminated by Modi government in 2016 and last year for the first time, the finance minister presented the combined Union Budget 2017. Since last year, with the merging of Railway budget with General budget, Indian Railways has stopped declaring the operating ratio numbers to the public. However, the key number still finds relevance internally. This financial year, Indian Railways may end up with an operating ratio of 95 per cent and has also set a target to achieve 93 per cent in the next financial year, according to an Indian Express report.
What is an operating ratio?
Operating ratio is a numeric figure which indicates the organization’s operating expenses divided by its operating revenues, which helps to determine the organization’s performance. Similarly, in Railways, operating ratio refers to the amount which the railways spend in order to earn a rupee. Therefore, a lower figure represents a better financial condition.
This fiscal’s operating ratio- 95 per cent is a slight improvement over the last year’s 96 per cent operating ratio, according to the Revised Estimates of Budget 2018-19, sources told paper. In addition, the sources also said that the Union budget 2018 may also notify a financial trajectory for Railways in order to lower the operating ratio to 75 per cent in five years. In order to establish a better financial condition by the end of next year, Railway Minister Piyush Goyal is eyeing around 20 per cent reduction in the transporter’s working expenses in 2018-19.
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The expenses comprising 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, which results in strain on the Railways financials.
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It is also expected that the Indian Railways will aim to a capital expenditure figure above of Rs 1.4 lakh crore, which is the highest ever and also an earnings of more than Rs 1.8 lakh crore. Some other key areas like railway electrification, mordernising the centuries old signalling system, construction of new rail lines, doubling, gauge conversion and renovation of the old railway tracks are also likely to be announced in the forthcoming union budget 2018.