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How 7th Pay Commission led to overall operating ratio of the Railways going down


New Delhi, Dec 05: Did the implementation of the 7th Pay Commission recommendations lead to the operating ratio in the Railways going down?

The Railways recorded an operating ratio of 98.44 per cent in 2017-18 which is the worst in the previous 10 years, the Comptroller and Auditor General (CAG) has said in a report tabled in Parliament on Monday.

How 7th Pay Commission led to overall operating ratio of the Railways going down

A measure of expenditure against revenue, the operating ratio shows how efficiently the railway is operating and how healthy are its finances. An operating ratio of 98.44 per cent means that the Railways spent Rs 98.44 to earn Rs 100.

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The Operating Ratio of the Indian Railways was 95.3 per cent in 2009-10, 94.6 per cent in 2010-11 and 94.9 per cent in 2011-2012. The national transporter's worst performance in the last two decades was in 20002001 when its operating ratio was 98.3 per cent. The following year, it improved to 96.

Railway Minister, Piyush Goyal said that when they look at the overall picture, the implementation of the pay panel's recommendations and running trains under the social obligation lead to the operating ratio going down by 15 per cent in just one year.

He also said that the increase in the salaries of the employees affected the operational cost of the Railways.

The operating ratio of railways has been above 90 per cent over the six years before 2017-18. The national auditor in its report on the railways' finances, said that the railways would have ended up with a negative balance of Rs 5,676.29 crore, instead of a surplus of Rs 1,665.61 crore, but for the advance received from NTPC and IRCON, the CAG report had said.

"The Indian Railways' operating ratio at 98.44 per cent in 2017-18 was the worst in the last 10 years," the national auditor, Comptroller and Auditor General (CAG), said in the report. "Exclusion of this advance would otherwise have increased the operating ratio to 102.66 per cent," the auditor said.

One of the contributing factors, it said, has been free and concessional fare tickets/ passes and Privilege Ticket Orders (PTOs) to various beneficiaries.

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It said that out of total 4.41 crore senior citizen passengers, 7.53 lakh (1.7 per cent) passengers opted to give up 50 per cent concession and 10.9 lakh (2.47 per cent) passengers gave up 100 per cent concession.

Goyal further said that following the implementation of the 7th Pay Commission recommendations the employee salaries went up from 14 per cent to 26 per cent. There has been an over expenditure of Rs 22,000 crore for salaries and pension of railway employees and this contributed to the overall operating loss, he also said.

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