Indian Railways should look into innovative ways for revenue generation and closely monitor its expenditure, the Comptroller and Auditor General (CAG) has said in a report that was tabled in Parliament
“The operating ratio during 2016-17 had deteriorated to the lowest level of 96.5% since 2000-01 when it was 98.3%,” said the CAG report on railways finances for 2016-17.
“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.”
The report said the national transporter should 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. There is hardly any justification for not fully recovering the cost of passenger services in case of AC classes,” the report said.
It said the practice of issuing free and concessional tickets should be scaled down. Non-availability of sufficient funds in depreciation reserve fund to replace the over aged assets is indicative of weak financial health of the railways, the report said. The CAG highlighted huge backlog of renewal and replacement of over aged assets in the railway system, which needs to be addressed for safe running of trains.
“Railways should impress upon the budget controlling authorities for regular monitoring of expenditure,” the report said.
“Internal control mechanism should be strengthened to reduce the instances of misclassification of expenditure. The unsanctioned expenditure should be controlled; administration should ensure all unsanctioned expenditure is regularised on priority.”