Indian Railway: Analysis and strategic improvements

Abstract

The operating ratio of Indian Railways being the ratio of expenses to revenue which measures the operational efficiency was 98.5% for the year 2017-18. The same is estimated to have crossed 110% mark for 2018-19. The railways needs to either find ways to boost revenues aggressively or cut costs drastically. A majority of the cost is on account of staff strength and staff cost. The wage bill including pensions was Rs. 1.15 trillion out of the total working expenses was Rs. 1.6 trillion. Before the pay commission recommendations, the staff costs to total expenses was 51.5% in 2014-15 budget. Railways recovers 57 per cent of its cost in passenger services. However, the number stands even lower at around 37 percent in case of suburban services.