Millennium Post

CAG unearths Rs 2,486-cr rail revenue loss as Kharge ready to present his first budget

CAG unearths Rs 2,486-cr rail revenue loss  as Kharge ready to present his first budget
Just a day before the presentation of Railways Budget the Comptroller and Auditor General (CAG) of India has unearthed a revenue loss of nearly Rs 2486.68 crore by the Indian Railways due to irregular grant of concessional tariff rate for booking of iron ore traffic during 2008-12.

The CAG in its report, tabled in Parliament on Tuesday, mentioned that losses due to failure of Railway Board in preventing the misuse of the dual pricing system introduced in May and July 2008 for transportation of iron ore. The freight rate fixed for transporting iron ore for non domestic consumption was more than three times the rate fixed for domestic consumption. ‘The Railways has failed as it allowed the concerned parties (nearly 358) to avail the domestic rate without submitting some of the essential documents,’ it reads.

A test Audit during the period May 2008 to March 2012 has revealed that a revenue loss of Rs 2486.68 crore besides a penalty of Rs 13869.86 crore is due for the recovery. ‘Rs 1670.57 crore was also due from Kudremukh Iron Ore Company Limited, Mangalore in case of iron pellets exported and this was in addition to the revenue loss of  Rs 1795.51 crore,’ the CAG report reads.

It was found that 153 parties did not submit any prescribed documents to avail domestic rate for carrying iron ore and 205 parties submitted some of the documents required for the concessional rate. ‘Railways allowed 153 parties to avail the domestic rate without submitting any of the prescribed documents before booking and delivery of 699 rakes carrying iron ore during 22 May, 2008 to 31 March, 2012. This resulted in revenue loss Rs 258.38 crore during the last four years between 2008 and 2012,’ the report reads.

‘The CAG has found that 205 parties availed the domestic rate without submitting some of the essential documents like the monthly excise returns, industrial entrepreneur certificate, affidavit, indemnity bonds. According to the report, 205 parties availed booking and delivery of 6306 rakes carrying iron ore during May 2008 to March 2012. Railways permitted these parties to avail of the domestic rate despite non-submission of prescribed documents resulting revenue loss of Rs 2228.30 crore,’ it reads.

CAG observed that the quantity of iron ore transported by rail for export declined by 44 per cent during the period 2008-09 to 2011-12. ‘Thus, prudency demanded that adequate safeguards in the form of procedures and checks be put in place against misuse of the dual pricing in iron ore traffic,’ the report says.

Semi-high speed train, more premier trains likely

Busy giving finishing touches to the interim rail budget, Railway minister Mallikarjun Kharge was on Tuesday tight-lipped about the likely contours of the document which he is to present on Wednesday in Parliament.

‘You will come to know tomorrow,’ was his response to repeated queries on whether it would be a passenger-friendly budget with a possible cut in fares.

The interim budget will be his maiden one and Kharge would be hard-pressed to reach out to all sections with populist measures in an election year.

Facing a revenue shortfall, Kharge may not bring about a reduction in basic passenger fares although he is likely to make changes in the fuel adjustment component so that its impact on ticket prices is minimum.

He is likely to announce more trains, new lines and better passenger amenities in the interim budget. The emphasis will be on introducing premium trains on 20 high-passenger density routes.

Encouraged by the success of the New Delhi-Mumbai AC premier train, for which fares were charged under a dynamic structure, the minister may announce as many as two dozen premier trains.

The Mumbai premier train fetched railways about 35 per cent more revenue than the regular Mumbai Rajdhani.

Kharge could also announce semi-high speed trains on the busy Delhi-Mumbai corridor, the survey work for which has been carried out jointly with Japan.
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