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Railways’ operating ratio — an indicator of the efficiency in operations — was worse off in 2016-17 than the level reported earlier, a CAG report has revealed.
If the actual expenditure on pension payments is taken into account, the operating ratio in 2016-17 works out to 99.54 percent and not 96.50 per cent, the report tabled in Parliament on Tuesday said.
It was observed that in respect of Zonal Railways, the actual amount required to meet the expenditure on pension payments was Rs 40,025.95 crore during 2016-17. However, Rs 35,000 crore was appropriated to the pension fund, the CAG report said.
The Government auditor has urged the Railways to revisit the “passenger and other coaching tariffs” so as to recover the cost of operations in a phased manner and reduce the losses in its core activities.
Freight traffic
In 2016-17, nearly 85 per cent of the profit from freight traffic was utilised to compensate the loss on operation of passenger services.
The fixation of passenger fares 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, said the Comptroller and Auditor General of India (CAG) report on Railway finances (for 2016-17).
The CAG has also made a case for scaling down the practice of issuing free and concessional fare passes/tickets to various beneficiaries in the case of AC Ist class; First Class and AC-2 tier.
Railway Budget
It may be recalled that till the year 2016-17, the Railway Budget was presented to the Parliament separately. However, the Government had decided to merge Railways Budget with the Union Budget from budget year 2017-18 onwards.
The CAG report also highlighted that non-availability of sufficient funds in Depreciation Reserve Fund to replace the over aged assets is 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, the report added.
Also, the Railways should make provision for depreciation in a more scientific method by adopting relevant accounting policies, the CAG report said.
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