CAG pulls up railways for inconsistent records

  • Sanjib Kr Baruah, Hindustan Times, New Delhi
  • Updated: Nov 28, 2014 00:07 IST

Coming down heavily on the Indian Railways for deviating from its own set of rules and regulations as laid down in the financial code and engineering code (FCEC), the Comptroller and Auditor General (CAG) has said that in the absence of records, the national auditor was unable to ascertain expenditures incurred while executing the projects.

“It indicated a lack of financial discipline and increased risk of material and financial losses,” said the report on the state of railway finances to be tabled in Parliament.

Of over 670 projects completed or commissioned by the Railways before March 2011, 78 projects—commissioned over 20 years ago—have no completion report. This is besides the 92 reports commissioned from 2008 to 2011 and 466 projects commissioned before March 2011, the CAG stated in its report, noting that the date of completion of 116 projects was not on record.

Besides efficient project execution, adherence to FCEC is imperative for proper accounting of financial transactions.

“Cases of expenditure in excess to sanctioned estimate remained unregularised for decades and has led to a situation of no control and check over expenditures in capital works. The rail ministry incurred expenses more than its agreed percentage of cost due to non-adherence to the terms and conditions executed with state governments relating to cost-sharing projects,” the report states.

Indian Railways incurred about `1,700 crore more than the authorisation given by Parliament in three revenue grants and seven appropriations even after obtaining supplementary provisions in all but three appropriations.

The CAG has found the Indian Railways is actually “incurring a loss on its core activities”. During 2011-12, there was a loss of about `23,640 crore on passenger and other coaching services while freight services made a profit of `23,077 crore.

A total of 11 reports will be laid down in Parliament Thursday, including the audit of hydrocarbon production sharing contracts (PSC), management of satellite capacity for DTH services and on Special Economic Zones (SEZ).

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