Railways may get more elbow room to spend in year ahead

livemint.com:

₹100, the Railways must spend ₹98. A fall in operating ratio means the transporter has more money left for capital expenditure, and vice versa. After falling to 97.45% in FY21, the railways’ operating ratio rose to 107.39%, 98.22% and 98.45% in FY22, FY23 and FY24 (budget estimates), respectively.

One culprit was its high pensions burden. However, its quick return to normalcy after covid and a pickup in both freight and passenger revenues may give enough room to the national transporter to raise its internal revenue generation in FY25, pushing down the operating ratio. Also, there is an expectation that the gross budgetary support will again stay above 90% of the total allocation, helping bring the operating ratio closer to the FY21 level of 97.45%, one of the persons quoted above said.

A query sent to the railway ministry remained unanswered till press time. The railways hopes to fully pay for its own expenses in the long run. In an interview with Mint earlier, railway minister Ashwini Vaishnaw had said that currently, the pension bill of ₹51,000 crore, salary and wage costs of ₹1 trillion, energy costs of ₹40,000 crore, and maintenance and spare costs of ₹8,000 crore are met from its own internal revenue.

And from March 2024, the railways would see a surge in cargo traffic as seven to eight major bottlenecks in freight movement have been removed. The minister’s confidence has also sparked optimism at North Block, which feels that after two pandemic years that curbed mobility and crimped revenues, the railways has registered a smart recovery from FY23 onwards and is expected to clock record freight and passenger traffic in FY25. The railway budget may peg a double-digit growth in its traffic revenue for FY25.