Railways used freight profit to hedge passenger-service losses: CAG

The biggest operational loss from the Sleeper Class, Ordinary Class, and Second Class, which stood at ₹17,819.21 crore, ₹17,076.90 crore and ₹16,357.02 crore, respectively

The ministry incurred around 72.22% of the total working expenses on staff costs, pension payments, and lease hire charges on rolling stock

New Delhi: #IndianRailways utilised the profit from freight traffic to cross-subsidise losses on the operation of passenger and other coaching services during 2022-23, a latest Comptroller and Auditor General (#CAG) report has shown.

The report, tabled in the on going Parliament session, said during 2022-23, the Ministry of Railways’ total expenditure was ₹4,41,642.66 crore (11.34% more than the previous year), which comprised ₹2,03,983.08 crore (7.21% more than the previous year) of capital expenditure and ₹2,37,659.58 crore (15.15% more than the previous year) of revenue expenditure.

The ministry incurred around 72.22% of the total working expenses on staff costs, pension payments, and lease hire charges on rolling stock.

Gross traffic receipts during 2022-23 were ₹2,39,982.56 crore, reflecting an increase of 25.51% over the previous year.

The increase in total receipts was mainly on account of an increase in passenger earnings, other coaching earnings, and freight earnings. Transportation of coal constituted 50.42% of freight earnings.

The Operating Ratio (OR) was 98.10% in 2022-23 against 107.39% in 2021-22.

Indian Railways generated a net surplus during 2022-23 compared to a net deficit in 2021-22.

The loss on operation of passenger and other coaching services decreased compared to the previous year. The loss of ₹5,257.07 crore in passenger operations was left uncovered during 2022-23, the CAG report said.

The report also recorded the biggest operational loss from the Sleeper Class, Ordinary Class, and Second Class, which stood at ₹17,819.21 crore, ₹17,076.90 crore and ₹16,357.02 crore, respectively.

The profit from #Freight traffic was utilised to cross-subsidise the loss on operation of #passenger and other #coaching services, it added.

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, the CAG report said.

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

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

Courtesy: “Deccan Herald”