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Understanding Operating Ratio (OR) in Railways

रेलवे में ऑपरेटिंग रेशियो (OR) को समझना

Operating Ratio in Railway

The Operating Ratio is a critical financial indicator used by railway systems (like Indian Railways) to measure operational efficiency and financial health. In simple terms, it tells us how much money the railway spends to earn 100 rupees.

ऑपरेटिंग रेशियो एक महत्वपूर्ण वित्तीय संकेतक है जिसका उपयोग रेलवे प्रणालियों (जैसे भारतीय रेलवे) द्वारा परिचालन दक्षता और वित्तीय स्थिति को मापने के लिए किया जाता है। सरल शब्दों में, यह हमें बताता है कि रेलवे 100 रुपये कमाने के लिए कितना पैसा खर्च करता है।

Operating Ratio in Railway

1. The Formula | सूत्र Operating Ratio in Railway

As shown in the image, the formula is:

छवि में दिखाए अनुसार, सूत्र इस प्रकार है:

Operating Ratio (OR) = (Gross Working Expenses / Gross Revenue) × 100

Components Breakdown | घटकों का विवरण:

A. GWE (Gross Working Expenses) | सकल कार्य व्यय:

This is the total cost of running the railway. It includes:

यह रेलवे चलाने की कुल लागत है। इसमें शामिल हैं:

• OWE (Ordinary Working Expenses): Day-to-day costs like salaries, fuel, and maintenance. (दैनिक खर्च जैसे वेतन, ईंधन और रखरखाव।)
• Appropriation to DRF (Depreciation Reserve Fund): Money set aside for replacing old assets. (पुराने संपत्तियों को बदलने के लिए अलग रखा गया पैसा।)
• Appropriation to Pension Fund: Money for retired employees’ pensions. (सेवानिवृत्त कर्मचारियों की पेंशन के लिए पैसा।)

B. GR (Gross Revenue) | सकल राजस्व:

The total money earned by the railway from various sources (X, Y, Z – Passenger, Goods, Sundry).

विभिन्न स्रोतों (यात्री, माल ढुलाई, अन्य) से रेलवे द्वारा अर्जित कुल धन।

Operating Ratio in Railway

2. Significance | महत्व

• A Lower Ratio (e.g., 80%) means the railway is healthy and has a surplus for expansion.
• A Higher Ratio (e.g., 98%) means the railway is barely covering its costs.
• कम अनुपात (जैसे 80%) का अर्थ है कि रेलवे स्वस्थ है और विस्तार के लिए उसके पास अधिशेष है।
• उच्च अनुपात (जैसे 98%) का अर्थ है कि रेलवे मुश्किल से अपना खर्च निकाल पा रहा है।

Summary Analysis | सारांश विश्लेषण Operating Ratio in Railway

The Operating Ratio is the mirror reflecting the financial discipline of a railway organization. While a ratio of 90-95% is common for public service railways, the goal is always to move towards 80% or lower by increasing “GR” (through better services) and optimizing “GWE” (through technology).

ऑपरेटिंग रेशियो वह दर्पण है जो रेलवे संगठन के वित्तीय अनुशासन को दर्शाता है। हालांकि सार्वजनिक सेवा रेलवे के लिए 90-95% का अनुपात सामान्य है, लेकिन लक्ष्य हमेशा “GR” बढ़ाकर और तकनीक के माध्यम से “GWE” को अनुकूलित करके 80% या उससे कम की ओर बढ़ने का होता है।

Example 1: Northern Zone (Efficiency Focus) Operating Ratio in Railway

• Data: Gross Revenue (GR) = 20,000 Cr; Expenses (GWE) = 16,000 Cr.
• Calculation: (16,000 / 20,000) X 100 = 80%.
• English: This indicates a very efficient zone where for every 100 earned, only 80 is spent.
• Hindi: यह एक बहुत ही कुशल ज़ोन को दर्शाता है जहाँ हर 100 रुपये की कमाई पर केवल 80 रुपये खर्च होते हैं।

Example 2: Mountain Railway (High Maintenance) Operating Ratio in Railway

• Data: GR = 500 Cr; GWE = 600 Cr.
• Calculation: (600 / 500) X 100 = 120%.
• English: The expenses exceed revenue due to difficult terrain. The railway is running at a loss.
• Hindi: कठिन भौगोलिक स्थिति के कारण खर्च राजस्व से अधिक है। रेलवे घाटे में चल रही है।

Example 3: Freight-Heavy Zone (Coal/Iron Ore) Operating Ratio in Railway

• Data: GR = 15,000 Cr; GWE = 9,000 Cr.
• Calculation: (9,000 / 15,000) X 100 = 60%
• English: Goods transport is highly profitable, leading to a robust OR of 60%.
• Hindi: माल ढुलाई अत्यधिक लाभदायक है, जिससे 60% का मजबूत ऑपरेटिंग रेशियो प्राप्त होता है।

Example 4: Suburban Local Network Operating Ratio in Railway

• Data: GR = 2,000 Cr; GWE = 1,900 Cr.
• Calculation: (1,900 / 2,000) X 100 = 95%.
• English: High operational frequency and subsidized fares result in a tight margin.
• Hindi: उच्च परिचालन आवृत्ति और रियायती किराए के परिणामस्वरूप मार्जिन बहुत कम है।

Example 5: High Pension Liabilities Scenario Operating Ratio in Railway

• Data: OWE = 5,000 Cr; Pension Fund = 3,000 Cr; GR = 10,000 Cr.
• Calculation: (8,000 / 10,000) X 100 = 80%.
• English: Even with high revenue, heavy pension payments can increase the OR.
• Hindi: उच्च राजस्व के बावजूद, भारी पेंशन भुगतान ऑपरेटिंग रेशियो को बढ़ा सकता है।

Operating Ratio (Railway Finance Concept)

English Explanation (Detailed)

Operating Ratio (OR) is a financial indicator used mainly in railway systems to measure how efficiently the railway is operating. It shows how much money the railway spends to earn every 100 units of revenue.

Formula

Operating Ratio (OR) = (Gross Working Expenses / Gross Revenue) × 100

Main Components

1. Gross Working Expenses (GWE) Operating Ratio in Railway

This represents the total operational cost of running railway services. It includes:

• Ordinary Working Expenses (OWE) – day-to-day operational cost like staff salary, fuel, maintenance.
• Contribution to Depreciation Reserve Fund (DRF) – money kept for asset replacement and renewal.
• Contribution to Pension Fund – amount reserved for employee pension payments.

So:
GWE = OWE + DRF Contribution + Pension Fund Contribution

2. Gross Revenue (GR) Operating Ratio in Railway

This is the total income earned by the railway. It may include:

• Passenger earnings (X)
• Freight earnings (Y)
• Other earnings like parcel, leasing, advertisement etc. (Z)

So:
GR = X + Y + Z (Apportioned income)

Interpretation

• Lower OR = Better financial health (Railway spends less to earn revenue)
• Higher OR = Lower efficiency (Railway spends more to earn revenue)

Example:
If OR = 85%, railway spends ₹85 to earn ₹100.

हिंदी विवरण (विस्तार से) Operating Ratio in Railway

ऑपरेटिंग रेशियो (OR) रेलवे की कार्यक्षमता को मापने का एक वित्तीय मापदंड है। यह बताता है कि रेलवे को 100 रुपये कमाने के लिए कितने रुपये खर्च करने पड़ते हैं।

सूत्र

ऑपरेटिंग रेशियो = (कुल कार्य व्यय / कुल राजस्व) × 100

मुख्य भाग

1. ग्रॉस वर्किंग एक्सपेंस (GWE) Operating Ratio in Railway

यह रेलवे के संचालन का कुल खर्च होता है। इसमें शामिल हैं:

• सामान्य कार्य व्यय (OWE) – वेतन, ईंधन, मरम्मत आदि।
• डिप्रिसिएशन रिजर्व फंड (DRF) योगदान – पुराने संसाधनों को बदलने के लिए।
• पेंशन फंड योगदान – कर्मचारियों की पेंशन के लिए।

सूत्र:
GWE = OWE + DRF + Pension Fund

2. ग्रॉस रेवेन्यू (GR) Operating Ratio in Railway

यह रेलवे की कुल कमाई होती है:

• यात्री आय (X)
• माल ढुलाई आय (Y)
• अन्य आय (Z)

सूत्र:
GR = X + Y + Z

समझने का तरीका

• कम OR = अच्छा प्रदर्शन
• ज्यादा OR = खर्च ज्यादा, लाभ कम

उदाहरण:
यदि OR = 90% है, तो रेलवे 100 रुपये कमाने के लिए 90 रुपये खर्च कर रही है।

10 Examples from Different Railways (Hypothetical but Realistic Style)

Final Summary Table Operating Ratio in Railway

Part 1: Formula Reminder Operating Ratio in Railway

Operating Ratio (OR) = (Gross Working Expenses / Gross Revenue) × 100

Where
GWE = OWE + DRF + Pension Fund
GR = Total Revenue (Passenger + Freight + Other)

Part 2: Solved Numerical Questions (Step-by-Step)

Question 1 Operating Ratio in Railway

A railway zone has:

• OWE = 40,000 Cr
• DRF = 5,000 Cr
• Pension Fund = 10,000 Cr
• Gross Revenue = 70,000 Cr

Find Operating Ratio.

Step 1: Calculate GWE

GWE = OWE + DRF + Pension
GWE = 40,000 + 5,000 + 10,000
GWE = 55,000 Cr

Step 2: Apply OR Formula

OR = (GWE / GR) × 100
OR = (55,000 / 70,000) × 100

Step 3: Calculate

OR = 0.7857 × 100
OR = 78.57%

Question 2 Operating Ratio in Railway

Given:

• GWE = 82,000 Cr
• GR = 95,000 Cr

Find OR.

Step 1

OR = (82,000 / 95,000) × 100

Step 2

OR = 0.863 × 100

Final Answer

OR = 86.3%

Question 3 Operating Ratio in Railway

A railway earns:

• Passenger = 25,000 Cr
• Freight = 45,000 Cr
• Other = 5,000 Cr

Expenses:

• OWE = 50,000 Cr
• DRF = 4,000 Cr
• Pension = 6,000 Cr

Find OR.

Step 1: Calculate GR

GR = 25,000 + 45,000 + 5,000
GR = 75,000 Cr

Step 2: Calculate GWE

GWE = 50,000 + 4,000 + 6,000
GWE = 60,000 Cr

Step 3: OR

OR = (60,000 / 75,000) × 100
OR = 0.8 × 100

Final Answer

OR = 80%

Question 4 Operating Ratio in Railway

If OR = 90% and GR = 1,20,000 Cr
Find GWE.

Step 1: Formula Rearranged

GWE = (OR × GR) / 100

Step 2

GWE = (90 × 1,20,000) / 100

Step 3

GWE = 1,08,000 Cr

Question 5 Operating Ratio in Railway

If OR = 75% and GWE = 60,000 Cr
Find GR.

Step 1

GR = (GWE × 100) / OR

Step 2

GR = (60,000 × 100) / 75

Step 3

GR = 80,000 Cr

Question 6 Operating Ratio in Railway

Given:

• OWE = 30,000 Cr
• DRF = 3,000 Cr
• Pension = 7,000 Cr
• GR = 55,000 Cr

Step 1

GWE = 30,000 + 3,000 + 7,000 = 40,000

Step 2

OR = (40,000 / 55,000) × 100

Step 3

OR = 72.72%

Question 7 Operating Ratio in Railway

If GWE increases from 70,000 to 77,000 and GR = 1,00,000

Old OR

= 70,000 / 1,00,000 × 100 = 70%

New OR

= 77,000 / 1,00,000 × 100 = 77%

Question 8 Operating Ratio in Railway

GR = 90,000 Cr
Target OR = 80%
Find Target GWE.

Step

GWE = (80 × 90,000) / 100
GWE = 72,000 Cr

Question 9 Operating Ratio in Railway

If:
Passenger = 20,000
Freight = 50,000
Other = 10,000
GWE = 64,000

Step 1

GR = 80,000

Step 2

OR = (64,000 / 80,000) × 100

Final

OR = 80%

Question 10 Operating Ratio in Railway

If OR = 95% and GR = 50,000

Step

GWE = (95 × 50,000) / 100

Final

GWE = 47,500

Quick Concept Understanding

If OR is:

• Below 80% → Very Efficient
• 80–90% → Moderate
• Above 90% → Financial pressure

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