Reflecting over the financial weaknesses Indian Railways is suffering from, the report noted the non-availability of sufficient funds in Depreciation Reserve Fund to replace the over aged assets
The Comptroller and Auditor General (CAG) has lambasted the Indian Railways in its latest report tabled in the Parliament on Tuesday over deteriorating operational costs in successive years.
The report claimed that the operating costs actually would have reached 99.54% against the reported 96.5%, if the actual amount of Rs 400.25 billion towards pension payments had been incorporated in its accounts instead of Rs 350 billion.
Operating ratio represents Railways spending over its expenditure to gain every Rs 100 and is an indicator of its efficiency in operations.
Noting that the operating costs has reached its worst since 2001 at 96.50% as compared to 98.34% in 2000-01, the CAG report criticised Railways for not fully recovering the cost of passenger services in case of AC 1st Class and AC 2-Tier and said the Ministry of Railways should also look into the various innovative ways for revenue generation and closely monitor the expenditure.
The report said had the additional expenditure on pension payments of Zonal Railways been appropriated, the gross working expenditure of Railways would have increased by Rs 50.25 billion to Rs 1.64 trillion leading to an operating ratio of 99.54%.
The report also noted that the total Capital grew from Rs 1,83,488 crore as on March 31, 2013 to Rs 3,12,635 crore as on March 31, 2017, total traffic handled declined from 7,27,610 million net tonne kilometres to 7,01,813 million net tonne kilometres respectively.
It said the Railways needs to take measures to improve competitiveness of its services vis-à-vis road and air travel.
The report said the 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.
"The fixation of passenger fare and freight charges should be based on the cost involved so that it brings both rationality and flexibility in pricing considering the financial health of Railways and the current market scenario," the report said.
Reflecting over the financial weaknesses Indian Railways is suffering from, the report noted the non-availability of sufficient funds in Depreciation Reserve Fund to replace the over aged assets.
"The huge backlog of renewal and replacement of over aged assets in railway system needs to be addressed for safe running of trains," it said.
FINANCIAL WEAKNESS
Reflecting over the financial weaknesses Indian Railways is suffering from, the report noted the non-availability of sufficient funds in Depreciation Reserve Fund to replace the over aged assets
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