The Comptroller and Auditor General (CAG) has asked the railways to revise passenger fares and curtail concessional passes to recover its operating cost in a phased manner.
"The railways needs to revisit the passenger and other coaching tariffs so as to recover the cost of operations in a phased manner of suburban train services and on account of liability of concessional passes to various classes of passengers need to be curtailed," the CAG said in its latest report submitted in Parliament today.
The CAG has also advocated the railways to improve productivity which has been deteriorating over the years and urged the national transporter to initiate effective measures to keep stringent check on misclassifications in accounting.
Between 2010-11 and 2014-15, 560 cases of misclassifications and mistakes in accounts worth Rs 3,548.95 crore pointed out by audit which were accepted by the railways.
Out of 560 cases, 426 cases amounting to Rs 3,031.36 crore pertained to six zonal railways.
The CAG has highlighted that in 2014-15 total revenue increased by 12.43 per cent which was below the compound annual growth rate (CAGR) of 13.99 per cent during the period 2010-14.
The growth of in freight earnings and passenger earnings were 12.66 per cent and 15.49 per cent respectively against the CAGR of 14.32 per cent and 12.30 per cent achieved during 2010-14.
The CAG has found that the railways has not been able to meet its operational cost of passengers and other coaching services.
There was a loss of Rs 33,821.70 crore on passenger and other coaching services in 2014-15.
The freight service earned a profit of Rs 38,312.50 crore which included that 88.28 per cent of the profit from freight traffic was utilised to compensate the loss on operation of passenger and other coaching services.
The CAG has observed that operating ratio of Eastern, Northern, North Eastern, Northeast Frontier, Southern Railways and Metro Railway Kolkata has been more than 100 per cent in past years.
There is an urgent need to analyse the reasons for their operational inefficiency and remedial measures need to be taken, the CAG noted.
The CAG has asked the railways to ensure that funds received from the LIC are used judiciously and not allowed to be idle and incur interest liability. The railways has tied up with the LIC for funding assistance as extra budgetary resources.
The CAG has also asked railways to ensure that the unsanctioned expenditure should be controlled and it should be regularised in priority.