The Comptroller and Auditor General of India has flagged serious shortcomings in Indian Railways’ efforts to monetise its extensive land holdings, warning that weak execution has undermined plans to boost non-fare revenue.

In a report tabled in the Lok Sabha, the CAG said that out of a total land holding of about 488,000 hectares, Railways had identified only 13 per cent as vacant by March 2023 and managed to award just 87.76 hectares, or a negligible 0.14 per cent, to developers. Alarmingly, none of the awarded commercial sites had been developed as of that date, the audit noted.

The report said Railways’ revenues continue to depend largely on passenger and freight traffic, with limited scope to raise passenger fares without affecting affordability, and over-reliance on freight being neither prudent nor sustainable. In this context, the CAG reiterated that non-fare revenue, particularly through land monetisation, is a critical pillar of Railways’ long-term financial strategy.

To professionally develop and monetise surplus land, the Ministry of Railways set up the Rail Land Development Authority in 2006. However, the audit found that outcomes have fallen far short of expectations. Since its inception, around 998 hectares—about 1.59 per cent of total vacant land—has been entrusted to RLDA, but as of March 2023, only 8.8 per cent of this land had been awarded for development.

The CAG observed that several sites were handed over to RLDA despite unresolved land titles, encroachments and other encumbrances, leading to stalled projects and non-monetisation. It identified systemic and operational deficiencies that delayed land development and revenue realisation. Of 188 proposals for commercial sites received by the Ministry of Railways, only 59 were approved and entrusted to RLDA, while 129 proposals, or 69 per cent, remained pending as of March 2023, largely due to missing mandatory clearances.

The audit also flagged weak coordination within Railways, noting that in some cases land-related issues were discovered only after projects were awarded to developers, reflecting serious lapses in due diligence. Several sites were later withdrawn from RLDA, primarily due to encroachment and title disputes.

Even among the limited land awarded to developers, the CAG found deficiencies in a significant number of commercial and multi-functional complex sites, highlighting irregularities across multiple levels, including zonal railways, RLDA and the Ministry of Railways.