CAG Flags Rs 5.73 Bn in Lapses across Indian Railways

25 Jul 2025 CW Team

The findings are part of Audit Report No. 5 of 2025, which was tabled in the Lok Sabha and earlier laid before the Rajya Sabha on 4 April. The report includes 25 key audit observations based on test audits conducted up to the financial year 2022–23, with some updates from later periods.

The report comes at a time when Indian Railways is seeking to modernise its infrastructure and attract private investment. However, the audit reveals persistent governance challenges that could hinder these reform goals.

Key lapses in revenue and operations

One of the most significant lapses flagged was Northern Railway’s short recovery of land licence fees worth Rs 1.48 billion from five government-aided schools, attributed to non-compliance with Railway Board directives.

Nine railway zones were found to have failed to recover Rs 550.51 million in contributions to District Mineral Foundations (DMF) from contractors involved in mining-related projects, despite having collected royalty charges.

East Central Railway lost Rs 500.77 million due to failure in levying shunting charges at Bina siding between April 2020 and March 2023. South Central and Northeast Frontier Railways were unable to realise Rs 250.48 million for deposit works, while South Central Railway incurred a loss of Rs 230.16 million due to delays in licence renewals for Very High Frequency (VHF) radio equipment.

The South Western Railway continued operating an express train between Satya Sai Prasanthi Nilayam and Bengaluru for six years despite poor occupancy, resulting in a loss of Rs 170.47 million.

In other findings:

Western Railway lost Rs 120.62 million due to failure to upgrade routes for higher axle loads.
Southern Railway incurred Rs 50.43 million in losses on the Karur–Nagercoil section for similar reasons.
West Central Railway faced a potential loss of Rs 60.16 million due to non-supply of rakes against premium indents.
South Eastern Railway lost Rs 100.25 million in freight earnings from operating unfit wagons empty.

Unutilised and incomplete infrastructure

The audit also uncovered idle public expenditure:

South Western Railway built a Road Over Bridge that has remained unused for over five years due to coordination issues with the Karnataka government, tying up Rs 110.81 million.
A loco trip shed in New Jalpaiguri remains non-functional, blocking Rs 90.33 million.
A terminal station at New Garia was poorly planned, leading to an infructuous spend of Rs 70.62 million.

The CAG, currently led by K. Sanjay Murthy since November 2024, continues to underscore the need for stronger oversight and planning within the Ministry of Railways to improve fiscal discipline and operational efficiency.

News source: Mint

The Comptroller and Auditor General of India (CAG) has identified financial lapses and operational shortcomings amounting to over Rs 5.73 billion across Indian Railways, raising concerns over systemic issues in revenue recovery, asset management, and project execution.The findings are part of Audit Report No. 5 of 2025, which was tabled in the Lok Sabha and earlier laid before the Rajya Sabha on 4 April. The report includes 25 key audit observations based on test audits conducted up to the financial year 2022–23, with some updates from later periods.The report comes at a time when Indian Railways is seeking to modernise its infrastructure and attract private investment. However, the audit reveals persistent governance challenges that could hinder these reform goals.Key lapses in revenue and operationsOne of the most significant lapses flagged was Northern Railway’s short recovery of land licence fees worth Rs 1.48 billion from five government-aided schools, attributed to non-compliance with Railway Board directives.Nine railway zones were found to have failed to recover Rs 550.51 million in contributions to District Mineral Foundations (DMF) from contractors involved in mining-related projects, despite having collected royalty charges.East Central Railway lost Rs 500.77 million due to failure in levying shunting charges at Bina siding between April 2020 and March 2023. South Central and Northeast Frontier Railways were unable to realise Rs 250.48 million for deposit works, while South Central Railway incurred a loss of Rs 230.16 million due to delays in licence renewals for Very High Frequency (VHF) radio equipment.The South Western Railway continued operating an express train between Satya Sai Prasanthi Nilayam and Bengaluru for six years despite poor occupancy, resulting in a loss of Rs 170.47 million.In other findings:Western Railway lost Rs 120.62 million due to failure to upgrade routes for higher axle loads.Southern Railway incurred Rs 50.43 million in losses on the Karur–Nagercoil section for similar reasons.West Central Railway faced a potential loss of Rs 60.16 million due to non-supply of rakes against premium indents.South Eastern Railway lost Rs 100.25 million in freight earnings from operating unfit wagons empty.Unutilised and incomplete infrastructureThe audit also uncovered idle public expenditure:South Western Railway built a Road Over Bridge that has remained unused for over five years due to coordination issues with the Karnataka government, tying up Rs 110.81 million.A loco trip shed in New Jalpaiguri remains non-functional, blocking Rs 90.33 million.A terminal station at New Garia was poorly planned, leading to an infructuous spend of Rs 70.62 million.The CAG, currently led by K. Sanjay Murthy since November 2024, continues to underscore the need for stronger oversight and planning within the Ministry of Railways to improve fiscal discipline and operational efficiency.News source: Mint

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