The Indian Railways’ operating ratio of 98.36 per cent in 2019-2020 does not reflect its true financial performance and if the actual expenditure on pension payments is taken into account, the ratio will be 114.35 per cent, according to a CAG report. Operating ratio (OR) represents the ratio of working expenses to traffic earnings and a higher ratio indicates poorer ability to generate surplus.
The Railways, facing a financial crunch over Rs 50,000 crore outgo as pension to more than 15.5 lakh former railway employees, has been consistently asking the finance ministry to relieve it of the pension burden by setting up a pension fund.
