Moneycontrol PRO
Upcoming Event:Attend Algo Convention Live, 2 Days & 12+ Speakers at best offer Rs.999/- for Moneycontrol Pro subscribers. Price Increasing Soon!
you are here: HomeNewsBusiness

Indian Railways improves operating ratio to 97.45% in Covid-hit 2020-21

The improvement in the running costs of the Railways means the national transporter was able to lower its expenditure and make up for the shortfall in passenger traffic through revenue generated by freight operations.

June 27, 2021 / 05:47 PM IST
Representative Image

Representative Image

Limited train services for most of the year with no subsidies or concessions and severely tightening of expenses have led to the Railways better its operating ratio to 97.45 per cent in the financial year 2020-21 from 98.36 per cent the previous fiscal, according to an RTI reply.

Operating ratio is the amount spent to earn every Rs 100. The lower it is the better. It is used to measure the operational efficiency of any organisation. Higher the operating ratio, lower the financial resources available for expansion and growth. The improvement in the running costs of the Railways means the national transporter was able to lower its expenditure and make up for the shortfall in passenger traffic through revenue generated by freight operations.

Explained: How 4G spectrum will help Indian Railways and millions of passengers

"Operating ratio for the year 2019-2020 was 98.36 per cent… the operating ratio for 2020-21 has been calculated at 97.45 per cent on a provisional basis," the Railway Board said in reply to an RTI query by Madhya Pradesh-based activist Chandra Shekar Gaur. A railway spokesperson attributed the improved numbers to the strict monitoring of expenses by the national transporter which, he said, is a "combination of initiatives aimed at maximizing revenue receipts and minimizing controllable revenue expenses".

"The expenditure was monitored and regulated strictly in line with train operations. Investments made in the past seven years in electrification helped the Railways not only save substantially in diesel cost but also helped it to be a more environmentally conscious organization. "Other expenditure control steps included strict economy and austerity measures, improved manpower planning, better asset utilization, inventory management etc. These initiatives were further supported by higher freight revenues," the spokesperson said.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

However, the Railways was aided in its austerity measures by the fact that it did not operate the highly subsidised passenger segment in full throttle in 2020-21. Till the end of the year, the Railways ran around 65 per cent trains with no concessions for any category of passengers, with the exception of a few, saving crores. It also saw a sharp decline in pension liabilities with the national transporter making an arrangement with the finance ministry to defer this expense.

With the electrification of major routes, the Railways also saved Rs 9,500 crore in traction cost over 2019-20. Similarly, savings of Rs 4000 crore were done through rationalisation and optimisation of duties. The Railways also saved Rs 3,000 crore last year as compared to 2019-20 by rationalisation and optimization of contracts and procurement of goods and services.

"Other revenue-enhancing measures, inter alia, include targeting progressively higher traffic throughput, expansion of commodity basket, effective and innovative marketing strategies to capture more traffic by business development units at all levels, optimum utilization of existing rail infrastructure, including rolling stock, enhancement in productivity and efficiency and focus on increasing the share of non-fare revenue sources in Railways' total revenue," the spokesperson said. With passenger carrying trains restricted, the Railways reported record freight loading in 2020-21 despite the challenges posed by the COVID-19 pandemic, which led to negative growth in loading during the lockdown.

Freight loading in 2020-21 stood at 1,232.63 million tonnes, up 1.93 per cent over 1,209.32 million tonnes the previous financial year, the Railway Ministry said. During 2020-21, revenue from freight loading for Indian Railways stood at Rs 1,17,386 crore, which is 3 per cent higher compared with Rs 1,13,897.20 crore in 2019-2020.



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

PTI
first published: Jun 27, 2021 05:47 pm
Sections
ISO 27001 - BSI Assurance Mark