Railways set right vital statistic

Ratio of operating cost to operating revenue likely to be lower at 84 v/s targetted 90.2.

The Railways expect to declare a marked improvement in performance for the current fiscal. On Rail Budget day, Railway Minister Lalu Prasad is expected to show an operating ratio of nearly 84.

This surpasses the targeted 90.2 and indicates that the financial health of the Railways has improved. The ratio is the expenditure on every Rs 100 earned.

For every Rs 100 of income, the Railways are expected to earn a surplus of Rs 16. In 2004-05, the surplus was nearly half of this figure at Rs 8.8.

Sources said the healthy operating ratio had been driven by the fact that the Railways net internal generation was expected to be nearly Rs 11,500 crore this fiscal. This is nearly 65 per cent more than Rs 6,963 crore fund balance in 2004-05.

This fund balance is appropriated by development fund, depreciation reserve fund, capital fund and safety fund.

Of the total Rs 11,500 crore, nearly Rs 6,000 crore is to be transferred to the depreciation fund for renewal and replacement of assets, while close to Rs 5,000 crore will go to the capital fund. The balance will be divided between development and safety fund.

In addition, the Railways may also allocate 25 -30 per cent more funds for acquiring rolling stock and its work programme.

Hence, the expenditure on rolling stock in 2006-07 will be about Rs 2,500 crore, up from Rs 2,009 crore in the current fiscal. Outlay on computerisation is expected to see a four fold rise to Rs 640 crore in 2006-07.

"With a huge cash earnings, our annual plan size will be about 30-35 per cent more than last year," a ministry official said.

"This means that the annual plan size will be between Rs 20,000-23,000 crore," he added. In 2005-06, the plan size was Rs 15,349 crore.

Officials added that the ministry did not expect central support to increase this year, even though it has asked for about Rs 10,000 crore under this head.

"The finance ministry has asked the Railways to be more self-reliant and with the earnings this year shooting up, the support is not likely to be increased," a ministry official said.

In fact, even in 2005-06, budgetary support for the Railways declined to Rs 7,200 crore from nearly Rs 11,000 crore the year before. The trend was likely to continue, officials added.