Operating ratio poor, Railways engaged in window dressing: CAG

NEW DELHI: The Indian Railways resorted to “window dressing” for presenting the working expenses and operating ratio in a better light for 2018-19, the federal auditor, CAG has flagged in a report tabled in the Parliament on Wednesday.
In its report on railway finances, the CAG found, “If advance freight of Rs 8,351 crore from NTPC and CONCOR was not included in the earnings of 2018-19, the operating ratio would have been 101.77% instead of 97.29%.The net surplus in 2018-19 was Rs 3,773.86 crore. Indian Railways would have ended with a negative balance of Rs 7,334.85 crore but for receipt of advance freight and less appropriation to depreciation reserve fund and pension fund. Ministry of Railways resorted to window dressing for presenting the working expenses and operating ratio in a better light.”
Operating ratio (OR) is the amount of money the railways spends to earn each rupee. A higher ratio indicates poorer ability to generate surplus.
In its earlier report presented to Parliament last December, the CAG had said the railways had the worst OR in the last 10 years at 98.44%. In that report, the auditor has also flagged how the railways would have ended up with a negative balance of Rs 5,676.3 crore instead of a surplus of Rs 1,665.6 crore but for the advance received from NTPC and IRCON.
The CAG report has also flagged how the railways failed to meet the target so far as the internal earnings was concerned. It found that around Rs 1.9 lakh crore was earned against the targeted internal earnings of Rs 2 lakh. The report said the railways could not achieve even revised estimate target of Rs 1.97 crore. Moreover, the total internal earnings included freight advance of Rs 8,351 crore received from NTPC and CONCOR for transportation of goods in 2019-20.
The CAG has also flagged delays in projects over the past five years due to inefficiency of zones and weak monitoring by the railway board. The report said scrutiny of records relating to 395 projects funded from extra budgetary resources (EBR), which includes borrowing, revealed that 268 projects were still in progress as on March 31, 2019.
The CAG audit has also said that the scrutiny of identification and sanction of projects for EBR funding revealed that financially unviable projects were sanctioned. “An amount of Rs 15,922 crore was incurred from EBR towards 79 unremunerative projects. The criteria for exclusion of projects pending land acquisition etc was not followed; 111 such projects were funded from EBR. None of these were completed as on March 31, 2019. There were instances of irregular utilisation to the tune of Rs 1,495 crore from EBR funds,” it said.