Railways improve financial performance; OR falls to 91.3 percent

Indian Railways on Thursday reported a further decline in its operating ratio (OR) to 91.3 percent from the budgeted target of 92.5 percent in 2014-15.

According to the railway, the OR has significantly improved, as it has also beaten the revised target of 91.8 percent for 2014-15.

Calculation-wise, OR is the amount spent on the day-to-day operations to earn revenues -- an indication of the funds left for safety and expansion.

An OR of 91.3 percent would mean that the railway is spending 91.3 paisa to earn 100 paisa (Re.1).

Globally, a 75-80 percent or lower OR is seen as a healthy benchmark.

During his maiden budget speech, Railway Minister Suresh Prabhu had promised a vastly improved OR. He had targeted to bring it down to 88.5 percent, or the lowest in nine years, from an unsustainable level of 93.6 percent in 2013-14.

"The railway board worked on a strategy to constantly improve the OR. It meant focusing on optimising of revenues and economy in expenditure without compromising on allocations for safety and cleanliness," the ministry was quoted as saying in a statement.

"The improvement in OR will enable railways to allocate more resources for developmental activities particularly safety, passenger amenities and modernisation," the statement said.

Segment-wise during 2014-15, passenger earnings grew at 15.5 percent, while revenues from ferrying goods rose by 12.7 percent over the previous corresponding period.

On the freight side, coal was the biggest revenue earner with loads of 37.5 million tonnes, followed by export-import container category at 5.2 million tonnes.

In the passenger segment, the reserved class sub-segment witnessed a 6 percent growth contributing to 61 percent to total passenger earnings.