CAG report flags ₹2,604.4 Crore losses in Railways due to financial mismanagement

The CAG’s report covers audit findings for the fiscal year 2021-22, as well as some issues from prior years that were not included in earlier reports

The Comptroller and Auditor General of India (#CAG) has identified financial losses amounting to ₹2,604.40 crore within the #IndianRailways, highlighting issues in 33 case studies related to non-recovery of #loans, Goods and Services Tax (#GST), poor decision-making in non-fare revenue (#NFR) generation, and unfruitful expenditures.

Railway Ministry Lost ₹2604 Crore due to Mismanagement-CAG Report: The Wire

The CAG’s report covers #audit findings for the fiscal year 2021-22, as well as some issues from prior years that were not included in earlier reports.

Notably, the Ministry of Railways incurred a loss of ₹834.72 crore due to interest payments on a ₹3,200 crore loan extended to #IRCON for land development, which was never executed.

The report recommends holding responsible those accountable for this financial loss and cautions against making decisions to generate non-fare revenue without proper feasibility studies at the end of the financial year.

Another highlighted issue includes a loss of ₹149.12 crore from 2018 to 2022 due to the Railways’ failure to levy charges for engine shunting activities in East Coast Railway.

The #CAGIndia also flagged non-compliance with GST provisions, resulting in a ₹13.43 crore shortfall in GST collection from siding owners. It urges the #Railways to collect the outstanding #GST and fix responsibility for the lapse.

Additionally, the #WestCentralRailway administration failed to revise the license fee for land leased to the Department of Posts, resulting in a loss of ₹10.61 crore. The CAG advises prompt execution of agreements and collection of revised fees.

#IRCON International Limited was also criticised for awarding a ₹1,110.80 crore #contract to an ineligible bidder, bypassing essential qualifying criteria. The CAG recommends #accountability for this undue benefit.

Furthermore, the report points out an unfruitful expenditure of ₹10.72 crore on the #Construction of an unnecessary washing pit by #NorthEasternRailway. The CAG suggests that such decisions be made only after ensuring site suitability and other relevant factors.

The CAG’s recommendations aim to address these issues and improve financial management and oversight within the Indian Railways.

(With inputs from #PTI)