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Railways' operating ratio crosses 111 per cent-mark in July
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SME Times News Bureau | 20 Aug, 2018
How much did Indian Railways spend to earn every Rs 100 in April-July this year?
In
this period, the national transporter set a record-high operating ratio
of 111.51 per cent - which means it spent Rs 111.51 to generate every
Rs 100, reflective of lower growth in traffic against the set target and
heavy outgo on account of increased pension liability and working
expenses.
Operating ratio is a gauge of operational efficiency
that measures expenses as a proportion of revenue. It indicates the
organisation's operating expenses divided by its operating revenues,
which helps to check its performance.
A higher ratio in railways
indicates less ability to generate surplus funds that could be used for
capital investments such as laying new lines and deploying more coaches.
Facing
stiff competition from other modes of transport in carrying people and
freight, the Railways earned Rs 17,273.37 crore from passengers against a
target of Rs 17,736.09 crore in the first four months of the current
fiscal, according to data put together by the Railways' finance wing.
Railways'
goods earnings were also below the budget projection during April-July
2018 at Rs 36,480.41 crore as against the target of Rs 39,253.41 crore.
The
total earnings of the Railways for the current fiscal ending July is Rs
56,717.84 crore against the target of Rs 61,902.51 crore.
Working
expenses have exceeded the budget projection for the April-July period
-- the Railways incurred Rs 52,517.71 crore as ordinary working expenses
against the target of Rs 50,487.36 crore.
"Besides the working
expenses, there are other expenditures which are causing operating ratio
to exceed the target," a senior Railway official told IANS.
The
pension liability, expenditure of Railway Board and railway institutions
apart from the ordinary working expense which has far exceeding the
total incomes during April-July 2018 resulting in operating ratio
touching 111.51.
After the implementation of the 7th Pay
Commission, the total pension outgo has been estimated at Rs 47,000
crore, which means railways has paid about Rs 12,000 crore during the
period under review.
However, the official said this was a lean
period for traffic and typically operating ratio improves in the last
quarter of a financial year.
The operating ratio has been hovering above 90 per cent for the last five or six years.
For
the whole of financial year 2018-19, operating ratio is estimated at
92.8 per cent as against 96 per cent in 2017-18. There are high hopes on
freight earnings with estimated increase of 51 million tonnes in
2018-19.
"The last three months of the fiscal are crucial when
freight picks up pace and we are hopeful that we will achieve the
target," the official said.
The Railways has earmarked its
highest ever capital expenditure of Rs 1.48 lakh crore for the current
fiscal and has also focused on capacity augmentation, electrification,
station redevelopment and overall infrastructure upgradation.
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