Rail Ministry understated its working expenditure in 2022-23: CAG Report

New Delhi: Railway’s total earnings and expenditure from its operations when compared with its cross subsidising records showed that it understated its expenditure in the financial year 2022-23 by more than 5,000 crore, the Comptroller and Auditor General’s report, recently tabled in the Parliament, has revealed.

The CAG found that while the Railways, after working out its earnings and expenditures, presented a net profit of Rs 2,517.38 crore, when the loss in passenger services was compensated with the profit from freight services, it showed a net loss of Rs 5,257.07 crore.

The audit showed that Railways’ total working expenditure (including appropriation to various funds) stood at Rs 2,37,659.58 crore whereas its earnings from passenger, coaching, freight and other services were Rs 2,40,176.96 crore generating a surplus of Rs 2,517.38 crore.

On the other hand, fiscal records related to cross subsidisation of passenger and other coaching services reflected that total expenditure in operation of all types of trains (passenger, coaching and goods) was Rs 2,45,393.71 crore and total revenue receipt (earnings) from all trains and sundry services was Rs 2,40,136.64 crore, incurring a loss of Rs 5,257 crore.

“From the above, it may be observed that the total working expenditure in the summary of fiscal transactions has been understated,” the CAG said.

It added, “The understated expenditure will not reflect true Operating Ratio (OR). Taking into account the understated expenditure the OR would be 101.33.”

The audit found that when taking into account the net profit of Rs 2,517.38 crore, the Railways OR was 98.10 per cent.

“A higher ratio indicates a poorer ability to generate surplus. Against the target of 96.98 per cent in the Budget Estimates, the OR of Railways was 98.10 per cent in 2022-23. This meant that Railways spent Rs 98.10 to earn Rs 100.00,” the report said.

According to the summary of cross subsidisation, Railways generated Rs 74,289.66 crore from all passenger operation services and Rs 1,65,846.98 crore from freight operations, making Rs 2,40,136.64 crore as total revenue receipts in 2022-23.