Indian Railways News

Railways’ Spending-Income Gap Highest In Last 18 Years: CAG Report

In what has been affecting Indian Railways maneuvering power in terms of providing better facilities to its passengers, Comptroller and Auditor General of India (CAG) has stated that Railways’ operating ratio has reached its worst since 2001 at 96.50 percent as compared to 98.34 percent in 2000-01.

“The Operating Ratio during 2016-17 had deteriorated to the lowest level of 96.50 percent since 2000-01 when it was 98.34 percent. Since Operating Ratio is a direct indicator of the working of Railways, the Ministry of Railways should also look into the various innovative ways for revenue generation and closely monitor the expenditure,” said the report.

The operating ratio shows the efficiency of an institution’s management by comparing operating expense to net sales. The lower the ratio, the better it is for the organisation.

The Railways has been struggling to get rid of its ageing assets and maintenance of the newly introduced ones. The report pointed out non-availability of sufficient funds in depreciation reserve fund to replace the over aged assets as indicative of weak financial health of Indian Railways.

“The huge backlog of renewal and replacement of over aged assets in railway system needs to be addressed for safe running of trains,” said the report.

Pointing out another suggestion, the CAG report said, “Ministry of Railways needs to revisit the passenger and other coaching tariffs so as to recover the cost of operations in a phased manner and reduce its losses in its core activities.”

Minister for Railways, Piyush Goyal while talking about reducing losses on 13 February, 2018, blamed the Trinamool Congress and Congress parties for deteriorating financial condition of the Indian Railways and said these parties owe answers to the country.

Goyal said the NDA government in 2014 got the poor performing Indian Railways in legacy. “If anybody is responsible for pushing the Railways to this stage then it is the Trinamool and Congress parties,” he said.

Goyal also accused the West Bengal Chief Minister Mamata Banerjee of putting additional financial burden on the Indian Railways by making loss-making Kolkata Metro a subsidiary of the Railways. “The thought of the party and its leaders are limited,” he quipped.

The CAG report further pointed out lags in the system, “There is hardly any justification for not fully recovering the cost of passenger services in case of AC 1stClass, First Class and AC 2-Tier.”

“Total Capital grew from 1,83,488 crore as on 31 March 2013 to 3,12,635 crore as on 31 March 2017, total traffic handled declined from 7,27,610 million net tonne kilometres to 7,01,813 million net tonne kilometres respectively,” added the report.

The CAG report also noted that the Railways needs to take measures to improve competitiveness of its services vis-à-vis road and air travel.

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