Piyush Goyal Blames Seventh Pay Commission for Fall in Railways' Operating Ratio

The Union Minister for Railways, Coal, Finance and Corporate Affairs also appealed to consumers to demand for bills, whenever they buy any goods or services which would help in reducing the rates under the GST.

New Delhi: Minister of Railways and Coal Piyush Goyal, while speaking during the News18 Rising India Summit on Friday, blamed the seventh pay commission as the reason behind the Indian Railways’ worst operating ratio since the year 2001.

“We've just had a seventh pay commission and that has caused a huge rise in salaries and pensions. The logistics cost due to freight rates has gone up, therefore, the operating ratio has deteriorated," said Goyal.

On March 13, the Comptroller and Auditor General of India (CAG) said in a report that the Railways’ operating ratio has reached its worst since 2001 at 96.50 percent.

“The Operating Ratio during 2016-17 had deteriorated to the lowest level of 96.50 percent since 2000-01, when it was 98.34 percent. Since Operating Ratio is a direct indicator of the working of Railways, the Ministry of Railways should also look into the various innovative ways for revenue generation and closely monitor the expenditure,” said the report.

The operating ratio shows the efficiency of an institution’s management by comparing operating expense to net sales. The lower the ratio, the better it is for the organisation.

Talking about his plans in the upcoming years, the railways minister said, "I am looking at reducing freight rates in the next 2-3 years and bring road traffic to railways."

Earlier, on February 13, while talking about reducing losses in Railways, Piyush Goyal had blamed TMC and Congress for deteriorating the financial condition of the sector and said that the parties owe answers to the country. “If anybody is responsible for pushing the Railways to this stage then it is the Trinamool and Congress,” he had said.

He also accused West Bengal Chief Minister Mamata Banerjee of putting additional financial burden on the Indian Railways by joining the loss-making Kolkata Metro to Railways. “The thought of the party and its leaders is limited,” he had said.