6 February 2026·PIB

Lower Energy Cost, Better Maintenance Practises and Increased Freight Led to Surplus in Railways: Ashwini Vaishnaw

In this note

1. At a Glance

Indian Railways (IR) posted a surplus in each of FY 2022-23, 2023-24 and 2024-25, with the Operating Ratio (OR) hovering near 98% — attributed by the Railway Minister to lower energy cost, better maintenance practices and increased freight loading [1].
Important for UPSC: OR is the prime examinable metric of Railway finances; the statement was a Rajya Sabha written reply by Shri Ashwini Vaishnaw dated 6 Feb 2026 [1].

On 6 Feb 2026, Union Minister for Railways Ashwini Vaishnaw placed three-year IR finance data in Rajya Sabha, attributing the surplus to three structural factors [1].
The disclosure follows the Union Budget 2025-26 railway capex push of ₹2,52,000 crore [5] and earlier record capex of ₹2,62,200 crore in interim Budget 2024-25 [6].

IR's Operating Ratio metric (working expenses ÷ gross earnings × 100) has been the principal solvency yardstick since the Acworth Committee (1924) that separated railway from general budget.
Rail Budget merged with the Union Budget in 2017 (Bibek Debroy panel recommendation).
OR trajectory: 97.45% (2019-20) → ~98% band post-COVID; freight, not passenger, has been the financial backbone [1][3].

Year	Operating Ratio	Gross Traffic Receipts (₹ cr)	Surplus (₹ cr)
2022-23	98.10%	2,39,983	2,517 [1]
2023-24	98.43%	2,55,273	3,260 [1]
2024-25	98.22%	2,65,114	2,660 [1]

CAGR of Gross Traffic Receipts (2022-23 → 2024-25): 5.1% [1].
Ministry: Ministry of Railways; Minister: Ashwini Vaishnaw (also I&B and MeitY) [1].
Freight loading: 1,512 MT in 2022-23 → 1,591 MT in 2023-24 (29% growth over 2020-21's 1,233 MT) [2].
FY 2023-24 freight revenue trajectory: record ₹2.56 lakh crore total revenue, net profit ₹3,260 cr [3].

Economic

Surplus is thin (<1.5% of receipts) — IR remains close to break-even; capex of ~₹2.52 lakh crore in 2024-25 is gross-budgetary-support driven, not internal accrual [5].
Freight contributes ~65% of revenue; passenger segment continues to cross-subsidise [2].

Administrative

Drivers cited: (i) lower energy cost (electrification + renewable PPAs), (ii) better maintenance (Condition-Based Monitoring, mechanised track maintenance), (iii) higher freight loading [1].
Zonal surplus/shortfall data published in Annual Statistical Statement on indianrailways.gov.in [1].

Environmental / Scientific

IR targets Net-Zero by 2030; 100% electrification of Broad Gauge network is the lever cutting diesel bill [4].
Solar/wind PPAs and energy-efficient 3-phase locos reduce traction cost per GTKM [4].

Governance / Federal

Railways is a Union List subject (Entry 22); finances integrated into Union Budget since 2017; surplus accrues to Consolidated Fund of India.

6 Feb 2026 — Vaishnaw's Rajya Sabha reply with 3-year OR/surplus data [1].
1 Feb 2025 — Budget 2025-26 retained railway capex at ₹2,52,000 crore [5].
FY 2023-24 — record total revenue ₹2.56 lakh crore, net profit ₹3,260 cr despite higher staff/pension/energy outgo [3].
Freight loading crossed 1,591 MT in 2023-24 [2].

IR Operating Ratio in 2022-23 = 98.10%; 2023-24 = 98.43%; 2024-25 = 98.22% [1].
Surplus 2023-24 = ₹3,260 crore — highest of the three years [1].
CAGR of Gross Traffic Receipts (2022-23 to 2024-25) = 5.1% [1].
Statement made in Rajya Sabha (not Lok Sabha) by Minister Vaishnaw on 6 Feb 2026 [1].
Three reasons cited: lower energy cost, better maintenance practices, increased freight [1].
Zonal surplus/shortfall data: Annual Statistical Statement of Indian Railways [1].
Railway capex Budget 2025-26: ₹2,52,000 crore [5]; Budget 2024-25: ₹2,62,200 crore [6].
Freight loading FY 2023-24: 1,591 MT [2].
Railways is Entry 22, Union List, Seventh Schedule.
Rail Budget merger year: 2017.
An OR below 100% ⇒ surplus; lower OR = better financial health [3].

GS-III — Indian Economy / Infrastructure (Railways).
Syllabus heading: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
Plausible stems: 1. "Operating Ratio is a misleading metric of Indian Railways' financial health." Examine. 2. Discuss how electrification and freight-mix changes have shaped IR finances in the post-pandemic period. 3. Evaluate the rationale and consequences of merging the Rail Budget with the Union Budget.

Dedicated Freight Corridors (DFCCIL) — Eastern & Western DFC drive freight share.
Mission Raftaar & Vande Bharat / Amrit Bharat — speed & passenger services.
PM Gati Shakti — multimodal logistics integration.
Kavach (TCAS) — indigenous Automatic Train Protection.
Railway electrification & Net-Zero 2030 target — energy cost driver [4].
Bibek Debroy Committee (2015) — Rail Budget merger genesis.
National Rail Plan 2030 — modal share target of 45% freight.
Acworth Committee 1924 — historic OR origins.

OR direction: lower OR = better; aspirants often invert it.
Surplus ≠ Profit-after-tax of a corporate; it's earnings after working expenses + appropriations.
Confusing Gross Traffic Receipts with Total Revenue (latter includes sundry/other earnings).
Statement was in Rajya Sabha, not Lok Sabha [1].
Railway capex figures: ₹2,62,200 cr (2024-25 BE) vs ₹2,52,000 cr widely quoted — both appear in PIB releases; verify source year [5][6].