The situation of the "severe financial crunch" being faced by the Railways has been laid bare by the Comptroller and Auditor General (CAG). According to the country's apex auditor, accumulated funds of the public transporter had eroded by as much as 93% in 2010-11.
Presented in Parliament on Tuesday, the CAG report brought out a few disconcerting facts. For one, the Depreciation Reserve Fund and Pension Fund of the Railways had closed in 2010-11 with negligible balances of Rs. 18.9 crore and Rs. 5.33 crore respectively.For the same year, the Development Fund and Capital Fund closed with negative balances of Rs. 1,213.34 crore and Rs. 885.71 crore respectively.
At the close of the year, the balances in reserve funds stood at a mere Rs. 342.52 crore. They had declined by Rs. 4,690 crore (93%) over the previous year.
The Railways' net surplus, after meeting the dividend liability, stood at Rs. 1,404.89 crore in 2010-11. This was 56% lower than the budget estimate, the report pointed out.
The situation is indicative of "continued poor financial performance" by the Railways, and "risk of future sustainability", the CAG said in its report. Meagre or negative balances in the reserve funds will adversely impact the safety aspects and future expansion of the existing services, it warned.
The CAG also found serious fault with its budgetary mechanism, pointing out that during the period under review, the Railways had incurred an expenditure of Rs. 3,052.78 crore more than what was authorised by Parliament.
Besides asking the Railways to ensure that the Fiscal Responsibility and Budget Management Act-2003 is implemented, the CAG slammed it for the "weak follow-up" on the budget speech and the seeming inability to plug gaps in the outcome budget.