Indian Railways’ 2017-18 operating ratio 98.44%, worst in 10 years: CAG

Indian railways, train
Indian Railways has been failing to meet its operational cost of passenger services and other coaching services | Photo: iStock

The Indian Railways, which has been witnessing an unstable financial condition, has clocked an operating ratio of 98.44% during the 2017-18 period, the worst in 10 years, revealed a Comptroller and Auditor General (CAG) report.

A measure of expenditure against revenue, the ratio shows how efficiently the railway is operating and how healthy its finances are. An operating ratio of 98.44% means that the railways spent ₹98.44 to earn ₹100.

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The CAG report, which was tabled in the Parliament on Monday (December 2), said the railways would have ended up with a negative balance of ₹5,676.29 crore instead of a surplus of ₹1,665.61 crore but for the advance received from NTPC and IRCON.

“Exclusion of this advance would otherwise have increased the operating ratio to 102.66%,” the report said.

The Federal had earlier reported the ratio was 96.5% in 2016-2017, much lesser than the 2017-18 period. For 2018-2019, it has been revised upwards from 92.8% at Budget Estimate to 96.2% in the Interim Budget, and further to 97.3%, it was reported.

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Indian Railways has been failing to meet its operational cost of passenger services and other coaching services with nearly 95% of its profits from freight traffic being used for compensating the loss incurred on operation of passenger and other coaching services.

A review has further revealed 89.7% of its revenue forgone on concessions were on account of concessions to senior citizens and privilege pass/privilege ticket orders (PTO) holders. The report also said the response to the “give up” scheme from the senior citizen passengers was not encouraging.

“Several instances of misuse of passes and irregular grant of concessions on medical certificates were noticed. Passenger Reservation System lacks adequate validation controls to validate age of freedom fighters and to prevent irregular multiple booking on the same privilege pass,” the report said.

Audit analysis of the finance of accounts of Indian Railways has further revealed its net revenue surplus slumped by 66.1% from ₹4,913 crore in 2016-17 to ₹1,665.61 crore in 2017-18, showing a declining trend of revenue surplus and the share of internal resources in capital expenditure.

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The share of internal resources in total capital expenditure also decline to 3.01% in 2017-18. “This resulted in greater dependence on Gross Budgetary Support and Extra Budgetary Resources,” the report said.

(With inputs from agencies)