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Tuesday, December 10, 2019

Railways’ operating ratio at 98.44 per cent in 2017-18, worst in 10 years: CAG

The CAG in its report on the Railways’ finances, 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 but for the advance received from NTPC and IRCON.

By: ENS Economic Bureau | New Delhi | Updated: December 3, 2019 2:45:29 am
Gujarat: Rail services hit after goods train derails The audit analysis of the finance accounts of Indian Railways revealed a declining trend of revenue surplus and the share of internal resources in capital expenditure.

Indian Railways’ operating ratio would have crossed the 100 per cent mark if not for the advance payments from NTPC and IRCON in 2017-18, when it recorded the worst operating ratio in 10 years, a Comptroller and Auditor General (CAG) report has said.

Operating ratio is the money spent to earn every Rs 100; the lower the better. The audit found that in 2017-18 it was 98.44, worst in 10 years.

The CAG in its report on the Railways’ finances, 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 but for the advance received from NTPC and IRCON.

The report was tabled in Parliament on Monday.

“Exclusion of this advance would otherwise have increased the operating ratio to 102.66 per cent,” the CAG said.

The Railways has also been unable to meet its operational cost of passenger services and other coaching services. Almost 95 per cent of the profit from freight traffic was utilised to compensate for the loss on operation of passenger and other coaching services, it said. The CAG has also said that the ‘give it up’ scheme for senior citizens was not a success.

The audit analysis of the finance accounts of Indian Railways revealed a declining trend of revenue surplus and the share of internal resources in capital expenditure. The net revenue surplus decreased by 66.10 per cent from Rs 4,913.00 crore in 2016-17 to Rs 1,665.61 crore in 2017-18.

The share of internal resources in total capital expenditure also decreased to 3.01 per cent in 2017-18.
“This had resulted in greater dependence on Gross Budgetary Support and Extra Budgetary Resources,” the CAG said.

The CAG also recommended that railways need to take steps to augment their internal revenues, so that dependence on gross and extra budgetary resources is contained.

“Under provisioning for depreciation is resulting in piling up of ‘throw forward’ of works concerning renewal of over aged assets. There is an urgent need to address this backlog and ensure timely replacement and renewal of old assets,” it said. It also advised the railways to avoid creating new funds without any “justifiable reason”.

 

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