Railways spends Rs 111 to earn Rs 100

India Today.in New Delhi  August 20, 2018

HIGHLIGHTS

Operating ratio of Indian Railways is 111 per cent

Data for April-July period paint dismal picture

Railways faces finance crunch for its upgradation plan

Overcrowded trains are a common sight in the country. The photograph above shows one such scene, captured at Patna. But according to the balance sheet for the period of April-July 2018, the Indian Railways is running at a record-high operating ratio of 111 per cent. (Photo: Reuters)

You might have been complaining about rising train fare but the railways has new figures to show its own plight. The latest data, gathered by the finance wing of the railways, show that the railways is spending more money than it earns through various passenger fare and freigth. For an income of every Rs 100, the railways spends Rs 111.51.

The railways has set a record-high operating ratio of over 111 per cent for April-July period. It reflects lower than targeted traffic growth but higher expenditure owing to increased pension liability and operational expenses.

Operating ratio of the railways has been high for many years but it has hovered in mid-90 per cent range for the last five or six years. It was 96 per cent in 2017-18. The estimated operating ratio for the whole 2018-19 was put at 92.8.

Higher operating ratio for railways simply means that the national transporter does not have money for capital investments. So, laying new railway lines, deploying more coaches and similar modernisation efforts cannot be carried out.

Interestingly, the railways has planned its highest ever capital expenditure for the current financial year at Rs 1.48 lakh crore. Capacity enhancement, electrification, station redevelopment and infrastructure upgradation are in the focus of the railways for the fiscal year. But with less money at hand, the plans may not hit the ground.

Here are the figures

The Railways earned Rs 17,273.37 crore from passengers during April-July period. The target was to earn Rs 17,736.09 crore in the first four months of the current fiscal. Earning from the goods was also below target. It earned Rs 36,480.41 crore as against the target of Rs 39,253.41 crore.

The working expenses of the railways have exceeded the budget projection for the April-July period - Rs 52,517.71 crore against the target of Rs 50,487.36 crore.

The implementation of the Seventh Pay Commission has put a heavy burden on the railways, costing about Rs 12,000 crore in pension alone during April-July period. The total pension outgo has been estimated at Rs 47,000 crore.