To overcome financial issues, Indian Railways should ‘rationalise both passenger and freight tariffs’, the Comptroller & Auditor General of India said recently in a report.
CAG criticised Railway Minister Mukul Roy’s decision to roll back the hike on passengers’ tariffs on general and sleeper class (II class) proposed by his predecessor, Dinesh Trivedi in the 2012-13 railway budget.
The report said, “It is important for the railways to review all capital works in progress and take expeditious decision with regard to closure of projects especially non-remunerative lines, where there is road connectivity and where the progress with the projects is no longer as valid. There is a need to focus more on viable projects.”
It also pointed out slow progress in identifying vacant land for commercial used and said only 3% of the total vacant land had so far been handed over to Rail Land Development Authority (RLDA).
However, on rationalisation issue, the Minister of State for Railways, Bharatsinh Solanki said:
“Railways has increased passenger fares for first class, AC 2-tier and first AC/executive Class by, respectively, 10, 15 and 30 paisa per kilometre with effect from April 1, 2012.
“In addition, various other optimization measures, such as enhancement of axle loads for enabling carriage of higher pay load per freight car, increasing the carrying capacity of wagons etc. have been implemented.
“Railways have also taken a number of steps to attract additional traffic particularly in the traditional empty flow directions and during lean seasons through a slew of freight incentive schemes. Efforts continue to be made for raising resources internally from other than traditional sources also.”
CAG asked Railways to explore alternate sources of financing, as ‘their accumulated funds have eroded by 93%’.
It also highlighted that there is heavy cross-subsidisation from freight services to passenger services and percentage of freight earnings used to subsidise the losses on passenger and other coaching services ranged between 15.80% and 34.32% from 2007-08 to 2009-10.
