The CAG report on Railways

Ex-rail minister Lalu Prasad’s turnaround of railways from a loss-making to a profit venture was more of a cosmetic exercise, said the CAG report. The CAG says, it was the new practice of issuing a “statement of cash and investible surplus” that helped Lalu project a rosy picture. The auditor has said that the innovation helped the former railway minister project a “cash and investible surplus” of Rs 88, 669 crore from 2004-2005 to 2008-2009 when the net revenue surplus was only Rs 34, 506 crore. CAG endorsed the white paper presented by Lalu’s successor Mamata Banerjee in Parliament, which questioned the turnaround story.However, the railways’ finances become worse during Mamata’s tenure as the net revenue surplus saw a sharp decline from Rs 13,431 crore in 2007-08 to Rs 4,457 crore in 2008-09 to a paltry Rs 75 lakh in 2009-10. The CAG has asked the railways to hike passenger fare, wind up delayed and unviable projects and strictly monitor expenditure to wriggle out of the financial mess. The railways were left with a paltry revenue of Rs 75 lakh in 2009-10. It said pricing must not result in below the cost return along with rising market share in freight.