The railways operating ratio is expected to improve to 96.96 per cent by the end of the current financial year despite coronavirus-related disruptions, Railway Board member Naresh Salecha said on Monday. The operating ratio means expenses as a portion of revenue or the amount spent on every rupee earned.
Salecha said as far as the finance of Indian Railways is concerned, its operating ratio was pegged at 96.15 per cent for 2020-21. “This is lower than the revised estimate of 98.36 per cent for 2019-20. A lower operating ratio can be attributed to lower expenditure on account of a fall in working expenses as well as a sharp decline in pension liabilities.
“Pension liability was budgeted at Rs 53,160 crore in the beginning of the current fiscal. However, the revised estimate stood at Rs 523 crore as the national transporter made an arrangement with the finance ministry to defer this expense,” he said. The Railway Board member noted that 2020 was an extraordinary and exceptional year due to coronavirus pandemic as a result of which passenger trains did not run.
“Our projections hence went haywire. Before this, we have been taking full pension liabilities. When we could not meet such liabilities, we came to an arrangement with the finance ministry so that a separate fund could be given to us, which we have to repay to the ministry. In a couple of years, we have to pay it back,” he said.