In what has been affecting Indian Railways maneuvering power in terms of providing better facilities to its passengers, Comptroller and Auditor General of India (CAG) has stated that Railways’ operating ratio has reached its worst since 2001 at 96.50 percent as compared to 98.34 percent in 2000-01.
“The Operating Ratio during 2016-17 had deteriorated to the lowest level of 96.50 percent since 2000-01 when it was 98.34 percent. Since Operating Ratio is a direct indicator of the working of Railways, the Ministry of Railways should also look into the various innovative ways for revenue generation and closely monitor the expenditure,” said the report.
The operating ratio shows the efficiency of an institution’s management by comparing operating expense to net sales. The lower the ratio, the better it is for the organisation.
The Railways has been struggling to get rid of its ageing assets and maintenance of the newly introduced ones. The report pointed out non-availability of sufficient funds in depreciation reserve fund to replace the over aged assets as indicative of weak financial health of Indian Railways.
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