CAG raps Railways for overshooting budget, giving low priority to safety
May, 17th 2012
The Comptroller and Auditor General has pulled up the Indian Railways for its poor financial performance, saying the transporter has been overshooting its budget year after year. "The percentage of expenditure in excess of limits authorised by Parliament has increased in the last three years from 1.88% in 2008-09 to 4.14% in 2010-11," the CAG said in its audit of 2010-11.
It said the railways took "weak actions" over the announcements made in the railway budget and did not present any statement of fiscal policy in Parliament as mandated in the Fiscal Responsibility and Budget Management Act.
The CAG said despite ending the year with a higher net surplus over the previous year, the railways' actual net surplus in 2010-11 was 56% less than the budget estimates and total fund balances declined by 93%. Because of the less revenue surplus, the money allocated to depreciation reserve fund (used for repairs and renewal of assets), development fund and capital fund have been less than the budget estimates. The CAG also found a huge gap in the budget as formulated and the budget as executed.
"Transparency requires that final accounts should be fully reconciled with the subsidiary records maintained by the organisation. It was, however, seen that total value of railway assets as shown in the budget documents do not match with the assets shown in the Balance Sheet," the CAG said.
The CAG also said that the railways was giving "low priority" to safety-related works. "Though sufficient funds were available, large number of road over-bridge and road under-bridge works were pending as on March 2011 and the actual budget allocations reflected low priority due to inadequate commitment by the railways," the report said.