Suresh Prabhu proposes lowest operating ratio for railways in 9 years

The Rail minister Suresh Prabhu said the railways need $100 billion or Rs 6 lakh crore in funding over the next 3-4 years.

IANS   New Delhi     Last Updated: February 26, 2015  | 13:36 IST
Rail Minister Suresh Prabhu
"This (proposed) operating ratio will be the best in nine years," Suresh Prabhu said. (Photo: PIB)

Addressing the pressing issue of finances for the Indian Railways, Rail Minister Suresh Prabhu on Thursday proposed an operating ratio below 90 per cent to increase revenues for the system.

The railways' operating ratio, that has been consistently above 90 per cent 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 per cent - as against the targeted ratio of 92.5 per cent for 2014-15, which has improved to 91.8 per cent," 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 per cent 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 per cent 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.

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