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Indian Railways doesn’t follow proper accounting norms for financial transactions, according to the Comptroller and Auditor General (CAG)’s report.
CAG’s findings for FY13 also show that the railways doesn’t follow its own rules and regulations laid down under the financial and engineering code for efficient execution of projects.
“Indian Railways also incurred Rs 1,670.2 crore more than the authorisation given by Parliament. The fund balances of railways had declined from Rs 15,654.5 crore in 2008-09 to Rs 4,073.4 crore in 2012-13,” said CAG.
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It also spotted excesses in the past four years in one revenue grant and one appropriation. This indicates Indian Railways’ failure to accurately estimate budgetary requirements to enforce fiscal discipline.
According to CAG, the railways achieved a positive balance by diverting payment of lease charges to Indian Railway Finance Corporation from ‘capital fund’ to ‘capital received as general Budgetary support from the Centre’.
“This resulted in depriving railways of the additional investments that could have been made on other capital works.” it said. CAG also raised questions on the concession agreements made by the railways for ‘public-private partnership projects.
“All the projects were considered economically viable except Hassan Mangalore Rail Development Corporation and Krishnapatnam Rail Corporation, where the internal rate of return was estimated as 10.5 per cent and 11.8 per cent, respectively, against the minimum benchmark of 14 per cent as prescribed by the Ministry of Finance,” said CAG in its report on the working of Indian Railways.
The two projects highlighted by CAG also face several other irregularities including fixation of concession period, lease rent and liability of railways at the time of transfer of assets. “This indicates the provisions laid down in the agreement were incomplete and not clearly defined.”
CAG found that completion reports were not prepared for 674 projects completed or commissioned prior to March 2011.
It recommended that the railways put in place a monitoring mechanism to ensure the provisions laid down in the codes and manuals are followed scrupulously to maintain financial discipline.
| CAG REPORT FINDS |
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