Railways’ 2017-18 operating ratio worst in 10 yrs: CAG

Railways’ 2017-18 operating ratio worst in 10 yrs: CAG

Updated on 3 December, 2019

GS3 Economy
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Recently, the Comptroller and Auditor General (CAG) has submitted a report of the Railway in the Parliament.

  • The railways recorded an operating ratio of 98.4% in 2017-18, the worst in 10 years. 

Key Findings:

  • The financial health of the railway had deteriorated considerably - They spent Rs 98.4 to earn Rs 100
  • The Railway received an advance payment from two public sector companies - NTPC and IRCON
  • The railways has been unable to meet its operational cost of passenger services and other coaching services. 
  • Almost 95% of the profit from freight traffic was utilised to subsidise the losses from passengers and other coaching services. 
  • 90% of the revenue forgone was on account of concessions
  • The Give-Up initiative found few takers. This initiative is to encourage senior citizens to travel without subsidy.
  • The “give up” initiative accounted for 52.5% of the total allowed by the national transporter. Most of them availed the concession in AC classes. 
  • Several instances of misuse of passes and irregular grant of concessions on medical certificates were also noticed.
  • Passenger reservation system lacks adequate validation controls to validate age of freedom fighters and to prevent irregular multiple booking on the same privilege pass.

The Give-Up Initiative of Indian Railway:

  • The initiative was started in 2017 to encourage senior citizens to give up their train fare concessions of either 50% or 100% as part of the railways’ bid to increase revenue.
  • At present, male senior citizens get 40 percent while women get 50 percent concession on the total fare. 

References:

[1]. https://timesofindia.indiatimes.com/business/india-business/railways-2017-18-operating-ratio-worst-in-10-yrs-cag/articleshow/72340601.cm


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