Railways on track for a better show

Higher revenues and bigger handouts are expected to help Indian Railways fare better in the year ahead, two people aware of the matter said.

For the first time in four years, the Union budget may peg Indian Railways' FY25 operating ratio below 98%, the people cited above said on condition of anonymity. An operating ratio of 98 means to earn 100, the Railways must spend 198. A fall in operating ratio means the transporter has more money left for capital expenditure, and vice versa.

After falling to 97.45% in FY21, the railways' operating ratio rose to 107.39%, 98.22% and 98.45% in FY22, FY23 and FY24 (budget estimates), respectively. One culprit was gits high pensions burden.

However, its quick return to normalcy after covid and a e pickup in both freight and passenger revenues may give enough room to the national transporter to raise its internal revenue generation in FY25, pushing down the operating ratio. Also, there is an expectation that the gross budgetary support will again stay above 90% of the total allocation, helping bring the operating ratio closer to the FY21 level of 97.45%, one of the persons quoted above said.

A query sent to the railway ministry remained unanswered till press time.