The latest comptroller and auditor general (CAG) report has revealed Indian Railways' financial performance for the 2021-22 fiscal year, with an operating ratio of 107.39%. This figure, which reflects the ratio of work costs to traffic revenues, indicates a reduced capacity to generate a surplus. The report, presented in Parliament, provides an analytical overview of Indian Railways' finances and accounts, using the audited accounts for the year ended 31 March 2022.

The CAG's report highlights a loss of $682.69 billion across all classes of  passenger services in fiscal year 2021-22. However, the auditor pointed out that this loss showed a decrease compared to the previous year.

Notably, the entire $391.96 billion profit from freight traffic was allocated to cross-subsidization and compensation for the losses incurred by passenger and other coaching services. In 2021-22, the loss of passenger operations of $320.73 billion remained uncovered, according to the report.

The CAG's report underscores that the operating ratio of 107.39% in FY22 represents a significant increase from the 97.45% recorded in the previous fiscal year, indicating a reduced ability to generate a surplus. This inability to generate a net surplus in 2021-22 contrasts with performance in 2020-21, where the operating ratio was 97.45%.

The report sheds light on the financial challenges facing Indian Railways, particularly in the context of passenger services. The operating ratio serves as an important indicator of the financial health of the railways, and the upward trend raises concerns about its ability to effectively manage costs and generate revenue.