Railways May See Best Operating Ratio in Five Years in FY26

nues over the past three years and strengthen its finances in FY26. Operating ratio of the Railways, India's largest employer and transporter, has remained high due to its heavy pension liability.

- FROM PAGE 1

However, its post-pandemic rebound and the pick-up in freight and passenger revenues may give it enough room to improve internal revenue generation in FY26, driving down the operating ratio.

A query sent to Union railway ministry remained unanswered. But a ministry official said on the condition of anonymity that over 10% growth in revenues (passenger and freight) may raise Railways' internal revenue generation in FY26 to over ₹5,000 crore, bringing operating ratio below 98%. In FY25, internal revenue generation is expected to remain flat at ₹3,000 crore.

"A big, aged, unanswered question in front of us is how we as a nation can fix these poor operating ratios," said Shailesh Agarwal, partner-risk consulting, EY India. "Indian Railways has never been able to meet operational expenses of passenger services with the revenue it generates. Passenger services are in losses as compared to freight services that are more profitable," Agarwal said, suggesting the ministry can look at raising passenger fares to match the cost of service.