Railway Budget 2018: Indian Railways targets Operating Ratio of 92.8% for year 2018-19

5 February 2018

Railway Budget 2018: The much awaited Union budget 2018 was presented on Thursday in the parliament by Finance Minister Arun Jaitley. It is also the full and final annual budget ahead of the 2019 Lok Sabha elections. Railway Minister Piyush Goyal was eagerly looking forward to key announcements in Budget for Railways 2018. As the old tradition of presenting Railway Budget and General Budget was abolished by the Modi government, both the budgets were merged under the Committee recommendations, headed by NITI Aayog member Bibek Debroy. As there were talks that this Fiscal year may end with an operating ratio of 95 per cent, the Railway enthusiasts were anticipating for the Budget 2018 to know the exact figure.

Operating ratio is a number which refers to the company’s operating expenses divided by its operating revenues. This helps to determine the overall performance of the company. Similarly, even in Railways, operating ratio is the money which the railways spend in order to earn one rupee. This simply indicates the fact that lower the operating ratio figure, better the financial health.

Coming to Financial and operating performance of Indian Railways, for financial year 2018-19, operating ratio is estimated at 92.8% as against 96% in year 2017-18. The excess of revenue over expenditure is Rs 12,990 crore in financial year 2018-19. It is estimated that the total Revenue receipts in 2018-19 will be increased by 7% to Rs 2,01,090 crore. Gross Traffic Receipts are also expected to increase by 7% to Rs 2,00,840 crore. Sundry other earnings are also expected to likely increase by 49% to Rs 20,790 crore.

It is highly expected that the total Revenue expenditure in 2018-19 is set to increase by 4% to Rs 1,88,100 crore. Other major components like ordinary Working Expenses (Rs 1,38,000 crore), appropriation to DRF (Rs 500 crore) and appropriation to Pension Fund from Revenue (Rs 47,500 crore) are included.

There are high hopes on freight earnings with estimated increase of 51 MT in 2018-19. The financial year of 2017-18 has witnessed a reversal of the tendency of low growth in freight loading over the previous 2 years. The incremental loading is 45 MT in April-January 2018, over the same period last year. In the month of January itself, there has been an incremental loading of 6 MT. All these factors indicate towards sustainable railway operations.

Other essential aspects like electrification of Railways, installation of Wifi and CCTVs, safety for railway passengers, doubling, gauge conversion, removal of unmanned railway crossings, development of Rail infrastructure, Bullet trains etc., were also announced by the finance Minister in Union Budget 2018.

Source: FINANCIAL EXPRESS