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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.
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"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.
First Published: Thu, February 26 2015. 13:02 IST