Prabhu proposes lowest operating ratio for railways in 9 years

He has proposed an operating ratio at 88.5% as against the targeted ratio of 92.5% for 2014-15

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

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