CAG slams Railways for Rs.2719 Crore excess spending

An excess spending of Rs 1877.09 crore was in revenue grant and another Rs 842.66 crore was in capital grant, taking the total to Rs 2719.75 crore

Railways spent over Rs 2,719 crore more than the authorisation granted to it by Parliament in 2013-14, and used Gross Budgetary Support money to repay debts, in violation of rules, the Comptroller and Auditor General has found in its latest audit, which was tabled in the Parliament on Friday.

“There was an increasing trend after 2011-12 in incurrence of expenditure beyond authorisation given by Parliament, in terms of number of grants and amount,” the government auditor said. An excess spending of Rs 1877.09 crore was in revenue grant and another Rs 842.66 crore was in capital grant, taking the total to Rs 2719.75 crore.

In another report auditing the freight policy, the CAG also pointed at unlawful freight evasion to the tune of Rs 12,722 crore by iron ore transporters, leading to a revenue loss to Railways and the government to the tune of Rs 29,236.77 crore, between 2008 and 2013.

In this report, auditing the Dual Freight Policy of iron ore transportation, wherein iron ore for domestic industries was charged less freight than that transported for export, the CAG has said that a huge number of companies appeared to have been allowed to transport iron ore at domestic rates, when they should have been charged at export rates. It talks about Railways not following its own rules and there were evidences of manual tampering of systems to aid revenue loss and freight evasion.

The report on railway finances reveals that in one capital grant, six revenue grants and one appropriation sought from Parliament, there were savings of more than Rs 100 crore— something which should not have been there. Unveiling the report, CAG officials called it poor budgeting practice.

On top of that, the explanatory note, that would have carried Railways reasons for doing so, could not be tabled in Parliament on Friday along with the CAG reports because Railways submitted the note to CAG only Thursday, whereas they should have submitted it at least a month ago for vetting by auditors, sources said.

In violation of rules, Railways used money received in the form of Gross Budgetary Support from the general exchequer to repay its rolling stock debt raised through its Indian Railway Finance Corporation (IRFC). The money should have gone from its own Capital Fund— money appropriated from revenue surplus. But due to insufficient appropriation in its Capital Fund, Railways made a payment of Rs 12,629.49 crore to IRFC towards the principle component of the borrowings. The government gives GBS to railways to create assets.