New Delhi : Addressing the pressing issue of finances for the Indian Railways, Minister Suresh Prabhu Thursday proposed an operating ratio below 90 percent to increase revenues for the system.
The railways’ operating ratio, that has been consistently above 90 percent for the past five years, suggests how much money is spent on day-to-day operations to earn the revenues, giving an indication of the funds left for safety and expansion.
“I have proposed an operating ratio at 88.5 percent — as against the targeted ratio of 92.5 percent for 2014-15, which has improved to 91.8 percent,” Prabhu said presenting the Railway Budget for 2015-16 in the Lok Sabha.
“This (proposed) operating ratio will be the best in nine years,” he said.
While a ratio of 93 percent means it saves just 7 paise on every 1 rupee it earns from operations, the latest rail budget comes at a time when its finances and efficiency are, perhaps, at their worst.
Globally, a figure of 75-80 percent or lower is what is seen as a healthy benchmark, but India ranks among the worst networks on this count.
Prabhu has said the railways need $100 billion or Rs.6 lakh crore in funding over the next 3-4 years.