Rajya Sabha

December 6, 2019

Abir Biswas speaks on CAG report on the need to increase efficiency of Indian Railways

Abir Biswas speaks on CAG report on the need to increase efficiency of Indian Railways


The CAG recently said in a report that the Indian Railways recorded an operating ratio of 98.44% in FY 2017-18. This is its worst performance in 10 years.  Operating ratio is a measure of the efficiency of operation. This means that for every 100 rupees earned, the Railways had to spend Rs 98.44.

The report also said that the Railways would have ended up with a negative balance of Rs 5,676.29 crore instead of a surplus of Rs 1,665.61 crore had it not been for the advances received from NTPC and IRCON, and in that case, the operating ratio would also have risen up to 102.66%.

Interestingly, the operating ratio of the Railways was 90.2% in 2012-13 and 91.3% in 2014-15. Thus, the BJP government has systematically managed to ruin yet another PSU.

Since 2016-17, the Railways’ revenue surplus too has been falling: from 2016-17 to 2017-18, the net revenue surplus decreased by 66.10%. The share of internal resources in total capital expenditure fell massively, from 26.14% in 2014-15 to 3.01% in 2017-18. The Railways is borrowing heavily from the Government for capital expenditure, which will further complicate its financial situation.

There are multiple reforms that the Railways needs to undertake now. Earning from freight needs to be increased, for which the freight booking system has to be automated. Issues that the CAG report has flagged off need to be tackled urgently, like irregular multiple bookings on the same privilege pass and the creation of new funds without justifiable reasons.

The Government needs to get its priorities right. While the much-advertised bullet train project has hit roadblocks, the fastest train, Vande Bharat Express broke down during its first trial run. Policy-making is also skewed. Forty per cent of the proposed number of seats on the bullet train goes vacant now. The Railways has reported losses amounting to several crores.

Prime Minister Narendra Modi had said, “The Indian Railways will become the growth engine of the nation’s Vikas Yatra”. It is imperative therefore that the Government directs its focus on the lifeline of the common Indian before all is lost.