Business Today
Railways hopeful of meeting earnings targets
Cash-strapped Railways is optimistic about achieving its earnings target in view of appreciable freight loadings in fertiliser, foodgrains and parcels besides increased earnings from advertising.
Cash-strapped railways on Friday said it was optimistic about achieving its earnings target for the current fiscal in view of appreciable freight loadings in fertiliser, foodgrains and parcels besides increased earnings from advertising.

"We are confident of achieving earnings targets of Rs 94,765 crores due to the positive growth in parcel loadings and in fertiliser and foodgrains among others," said Railway Board Chairman Vivek Sahai.

Railway finances have come under strain due to the implementation of the Sixth Pay Commission report.

The ban on illegal mining activities in Orissa and Karnataka has also affected railways' revenue earnings from freight. Railways lost more than 13 million tonnes in iron ore or Rs 2,500 crores due to fall in loading in these states.

The Naxal menace also hampered its revenue earnings with Rs 800 crore being lost on account of shortfall in coal loadings.

Sahai said implementation of the Sixth Commission report had a major effect on railways leading to its current financial state when operating ratio is 95.3 per cent.

Operating ratio is the sum spent to earn Rs 100. "The increasing operating ratio is a temporary phenomenon and would come down like it had happened after the implementation of the Fifth Pay Commission," he said.

After the Fifth Pay Commission was implemented, the operating ratio had also gone up to 90.5 per cent but came down to about 75.9 per cent in 2007-08.

Sahai said in 2008-09 railways had to pay 40 per cent of the arrears to its employees while implementing pay panel recommendations which pushed the operating ratio up to 90.5 per cent.

In 2009-10, the operating ratio went up to 95.3 per cent as 60 per cent of the arrears were paid.

Railways with 14 lakh employees and 12 lakh pensioners had to dole out Rs 55,000 crores for implementing the pay commission report, including Rs 16,400 crores on account of pension liabilities from its internal resources.
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