Railways May See Best Operating Ratio in 5 Yrs

The Union budget may peg Indian Railways' operating ratio at the best in five years in FY26 on higher freight revenue and increased central funds, two people aware of the matter said.

- Subhash Narayan

NEW DELHI:

Operating ratio, a measure of operational efficiency, is the ratio of amount spent to earn every ₹100. A higher ratio signals weak ability to generate a surplus, while a lower operating ratio means the Railways can spend more on large capex projects. In FY26, the operating ratio is expected to be below 98%, the first time since FY21, the people cited above said on the condition of anonymity.

After falling to 97.45% in 2020-21, the Railways' operating ratio in the next four years remained high at 107.39%, 98.14%, and 98.65% (revised estimates), and 98.22% (budget estimate) in FY22, FY23, FY24 and FY25, respectively. The finance ministry expects the national transporter to build on its success of increasing revenues over the past three years and strengthen its finances in FY26.