Consider the following statements about Operating Ratio in Indian Railways:
- The higher the operating ratio of Indian Railways the better is the condition of Indian Railways
- Operating ratio’ of Indian Railways is high on account of social service obligation imposed in Budget
Which of the above statements is/are correct?
The financial health of the railways is determined by its Operating Ratio (OR). Operating Ratio indicates how much railway spends to earn a rupee. An Operating Ratio of 90% means that Railway is spending 90 paisa to earn 100 paisa. With Seventh Pay Commission into effect, the OR is expected to go above 100%.
This question is a part of GKToday's Integrated IAS General Studies Module