Providing a detailed insight into the sorry state of Indian Railways’ finances, the Comptroller and Auditor General (CAG) has said in no uncertain terms that “there is a need to review the passenger fare structure” so that is in sync with rising prices. Passenger fares were last hiked some seven years ago.
In addition, CAG has also taken note of the railways’ “social burden” which has only led it to expand its network on uneconomical routes, which has again added to its financial woes.
In its report tabled in Parliament on Friday, CAG has said that “the way forward for IR (Indian Railways) to improve its finances is to rationalise bioth freight and passenger tariffs through some form of pre-determined non-discretionary inflation indexing”.
It would also like the railways to review and consider the possible closure of unremunerative railway line projects where there has been little progress over the years if these areas already connected by roads.
In another telling observation that will find most railways passengers nodding in agreement, CAG has pointed an accusing finger at the railways Tatkal booking system as well as its passenger reservation system (PRS).
In the case of Tatkal tickets, it has said their booking beyond business hours is “intentional bypassing of controls within the PRS by railway officials”.
It has also pointed out irregularities in the booking of tickets through PRS counters and “irregular bookings by reservation clerks, connivance of railway agents and booking clerks that defeat the purpose of the Tatkal scheme”.
On the losses incurred by the railways passenger and coaching services, these doubled over a five-year period.
It shot up from `7,141.69 crores in 2004-05 to `15,268.41 crores in 2008-09. CAG further wants: “This loss is likely to be much higher in 2009-10.”
Taking note of the huge losses, CAG has called for a review of the railways fare structure “to ensure that the pricing does not result in below the cost return.” It has, in fact, suggested the use of “inflation indexing” to “make the costing realistic”. In addition, it also wants freight rates rationalised.
The uneconomical routes that the railways is forced to ply trains too caused the railways huge losses over a five-year period (2005-10). According to CAG, the railways suffered a loss of `3,228 crores owing to this social obligations of the railways.
This, even though CAG in an earlier report had called upon the railways to close uneconomic lines. Unable to close them owing to reluctance on the part of state governments to allow this, the railways suffered losses of `1,198 crores on them in 2009-10.