CAG: Railways Understated Expenses By ₹5,257 Crore
The CAG observed that this understatement concealed the true Operating Ratio (OR). While Railways’ records indicated an OR below 100, factoring in the higher expenditure pushed it to 101.33, meaning the organisation spent more than it earned.
NEW DELHI: A Comptroller and Auditor General (CAG) report has revealed that the Railways understated its expenditure for 2022-23 by more than ₹5,000 crore, distorting its financial position.
The report, tabled in Parliament, noted that while Railways presented a net profit of ₹2,517.38 crore after balancing its earnings and expenditure, once the losses in passenger services were accounted for against freight profits, the national transporter actually posted a net loss of ₹5,257.07 crore.
According to the audit, Railways’ total working expenditure (including appropriations to various funds) stood at ₹2,37,659.58 crore, while its combined earnings from passenger, freight, coaching, and other services were ₹2,40,176.96 crore, leaving a reported surplus of ₹2,517.38 crore.
However, fiscal records on cross-subsidisation showed that total expenditure on operations of passenger, coaching, and goods trains was ₹2,45,393.71 crore, whereas total revenue receipts were only ₹2,40,136.64 crore, reflecting a loss of ₹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 report stated.
The CAG observed that this understatement concealed the true Operating Ratio (OR). While Railways’ records indicated an OR below 100, factoring in the higher expenditure pushed it to 101.33, meaning the organisation spent more than it earned.
The report further showed that in 2022–23, Railways earned ₹74,289.66 crore from passenger operations and ₹1,65,846.98 crore from freight services, making total receipts of ₹2,40,136.64 crore. On the expenditure side, freight services cost ₹1,11,062.87 crore while passenger services consumed ₹1,34,330.84 crore, adding up to ₹2,45,393.71 crore.
This translated into a loss of ₹60,041.18 crore on passenger services and a profit of ₹54,784 crore from freight operations, with freight revenues cross-subsidising passenger losses.
The auditor also flagged the biggest operational losses in Sleeper Class (₹17,819.21 crore), Ordinary Class (₹17,076.90 crore), and Second Class (₹16,357.02 crore).
