CAG report on Railway Finances

The Comptroller and Auditor General recently submitted a report on the finances of Indian railways in the Parliament. Some of the highlights of the report are

  • The Indian Railways’ AC Chair Car was added to the list of service categories that generate operational profit. This is notable because over the past 5 years, only the AC 3 tier category was included in the list. By tradition, all the passenger train services run on operational losses.
  • This could be the reason why train like Tejas Express and the Vande Bharat Express provide AC Chair Car services entirely. This strategy could bring in more operational profit for the Indian Railways.
  • The Indian Railways control fares on passenger trains as a response to political and social pressures apart from reasons due to competition from AC buses and air travel services.
  • The subsidies provided by the railways has increased over the last 5 years with respect to both suburban and ordinary train services.
  • Many of the services incur high operational losses ranging from AC 2 tier’s 13.6% to the electrical multiple unit suburban train services’ 64.74%.
  • Over 1/10th of the reserved passengers avail concessions from the railways. This constituted about 8.42% of the earning from the reserved category.
  • Maximum utilisation (more than 50%) of concession was by senior citizens, followed by privileged pass holders.
  • The report noted the misuse of the ‘Freedom Fighter’ concession. The railways provides free services throughout the lifetime for freedom fighters and their companions through the codes FREEDM and FREECM. The misuse stems from lack of measures to validate the applicants’ age.

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