Indian Railways aims to cut operating ratio

Indian Railways aims to cut operating ratio, which is the money spent to earn every Rs.100, to 84.9 percent in 2012-13 from 95 percent in the current financial year, Railways Minister Dinesh Trivedi said Wednesday.

While presenting his ministry’s budget for the next fiscal, Trivedi said reducing operating ratio would be one of the priority areas of the Indian Railways in the next five years.

“Our target is to bring down the operating ratio, which is at the moment 95 percent, to 84.9 percent in 2012-13 and to 74 percent in terminal year of 12th five year plan, which will be the improvement the best ever achieved by Indian Railways,” Trivedi said.

“This would need to be supported by sustainable financial model,” he said.

He said the government has outlined a long-term plan to improve the financial health of Indian Railways, which employs 1.36 million people and has annual revenue base of Rs.106,000 crore.

The minister said railways must get at least 10 percent of the government’s total spending on infrastructure sector.

According to the approach paper of the 12th plan, investments to the tune of $1 trillion are proposed in infrastructure sector over the next five years; half of it is expected to come from government resources.

Presenting his maiden budget, Trivedi said Indian Railways expected to receive Rs.2.5 lakh crore as budgetary support from the government in the 12th five year plan that begins April 1.

“There cannot be more opportune moment to formulate a long-term plan now as we are at the threshold of finalisation of 12th five year plan. My budget therefore looks at time horizon of much longer period as I intend to follow a carefully thought out plan for at least five years,” the minister said.

The Indian Railways run the third largest railroad network in the world spread over some 64,000 route km.