RAILWAYS

Indian Railways ‘window-dressed’ finances to present Operating Ratio in better light in 2018-19: CAG Report

To present its Operating Ratio in a better light in the year 2018-19, Indian Railways resorted to “window dressing” of its finances, IE reported citing a CAG report. The term Operating Ratio refers to the ratio of working expenses to traffic earnings, therefore, the lower the Operating Ratio is, the better it is.

The Comptroller and Auditor General (CAG) in its report stated that against the Operating Ratio (OR) target of 92.8% in the Budget Estimates, the OR of the national transporter was 97.29% in 2018-19. This meant that Rs 97.29 was spent by Indian Railways to earn Rs 100. IE quoted the CAG the report as saying that one of the reasons that a better OR was shown than it actually was is because of the advance freight earnings of more than Rs 8,000 crore taken in the year to carry the freight the following fiscal year.

However, as per the report, the OR would have been 101.77% instead of 97.29% if advance freight of Rs 8,351 crore from CONCOR and NTPC was not included in the earnings of the financial year 2018-19.

Source
financial express
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