E-Paper
In 2021-22, Railways’ finances slipped into ‘concern zone’: CAG
The CAG report said that the Operating Ratio (OR) of the Railways was 107.39% in 2021-22.
New Delhi The Indian Railways’ finances have slipped into a “concern zone”, with the national railway operator spending ₹107 to earn ₹100 during 2021-22 owing to higher appropriation to fund pensions, the Comptroller and Auditor General (CAG) said in a report tabled in Parliament.
The report said that the Operating Ratio (OR) of the Railways was 107.39% in 2021-22 as against 97.45% in 2020-21.
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The OR is a measure to calculate the ratio of working expenses to traffic earnings -- a higher ratio indicates lower ability to generate a surplus.
According to the report, the Indian Railways could not generate a net surplus during 2021-22 as it had done in 2020-21 with an operating ratio of 97.45%.
The report also found that the total expenditure (revenue and capital heads) of the ministry of railways was ₹3,96,658.66 crore (35.19% more than the previous year), which was comprised of ₹1,90,267.07 crore (22.61% more than the previous year) of capital and ₹2,06,391.59 crore (49.31% more than the previous year) of revenue expenditure.
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According to the report, the railways incurred around 75.47% of the total working expenses on staff costs, pension payments and lease hire charges on rolling stock.
According to the CAG, inadequate generation of internal resources resulted in greater dependence on Gross Budgetary Support (GBS) and Extra Budgetary Resources (EBR). The amount of EBR was ₹71,065.86 crore, which represented a decrease of 42.31% as compared with 2020-21.
The report also said passenger fares are cross-subsidised using profits generated on freight operations. This cross-subsidisation continues to be a concern, as railways has not been able to raise fares in the sleeper class.
According to the CAG, in FY22, the railways’ loss decreased over the previous year but the entire profit of ₹36,196 crore from freight traffic was utilised to cross-subsidise and compensate the loss on operation of passenger and other coach services.
