GS Paper 3
Syllabus: Economy: Railways
Source: HT
Context: The Comptroller and Auditor General (CAG) reported that in the fiscal year 2021-22, the financial health of Indian Railways entered a “concern zone.”
Key findings of the CAG:
| Key Findings | Details |
| Operating Ratio (OR) | The railway operator spent ₹107 to earn ₹100 due to increased pension funding |
| Net Surplus | Indian Railways couldn’t generate a net surplus in 2021-22 |
| Total Expenditure | Ministry of Railways’ total expenditure increased over 35% more than the previous year. |
| High revenue Expenses | Over 75% of total working expenses are spent on staff costs, pension payments, and rolling stock lease charges |
| Dependence on Budgetary Support and Resources | Inadequate internal resource generation led to greater dependence on Gross Budgetary Support (GBS) and Extra Budgetary Resources (EBR) |
| Cross-Subsidization of Passenger Fares | Passenger fares subsidized by profits from freight operations |
For Challenges hindering the development of Railways in India: Click Here
Key recommendations from Vivek Debroy’s committee for Indian Railways:
| Recommendations | Details |
| Restructuring and Unbundling | Separate Railways’ functions into distinct verticals like operations, regulation, and infrastructure |
| Create an independent regulatory body | |
| Form Rail Development Authority (RDA) | |
| Commercial and Financial Autonomy | Enhance commercial and financial autonomy of Zonal Railways |
| Decentralization of Powers | Delegate more decision-making powers to lower levels of management |
| Resource Mobilization and PPP | Increase non-fare revenue through advertising, commercial use of stations, and land monetization. Explore PPP for projects |
| Technology Integration and Modernization | Integrate technology for better customer service, efficiency, and safety |
| Governance and Performance Management | Implement an outcome-oriented performance management system |
Insta Links:
Mains Links:
Why is Public Private Partnership (PPP) required in infrastructure projects? Examine the role of the PPP model in the redevelopment of Railway Stations in India. (UPSC 2022)
