Title - Trinamul Railway Ministers lead Railways near to Bankruptcy, confirms CAG

What was spoken of in whispers and insinuations so far has now emerged in black and white: Indian Railways indeed went perilously close to bankruptcy in the years the Trinamool Congress was in charge.

A Comptroller and Auditor General (CAG) report tabled in Parliament on Tuesday shows railway funds dwindled from Rs.21,681.60 crore in 2007-08 to a mere Rs.1,770.91 crore in 2011-12. The Trinamool Congress was in charge of the ministry for three years in this period of Mamata Banerjee from 2009-11 and Dinesh Trivedi and Mukul Roy in 2012.

Mamata’s railway budgets were criticized for being too populist as she stubbornly refused to increase fares for the reasons of low publicity stunts she had practiced, despite the rising costs and announced new trains and infrastructure projects, most of them aimed at wooing her home constituency in West Bengal.

Trivedi, who succeeded Mamata after she quit to become the chief minister in 2011, probably realized the railways was hurtling towards an economic disaster and announced a fare hike in his budget despite being asked not to do so. The result: he lost his job and Mamata installed Mukul Roy, who rolled back the fare hikes. The railways continued to bleed.

The CAG report is “highly critical” of the way the railways was administered in this period and budgets drafted without heeding suggestions from the finance ministry. “Existing internal control in IR (Indian Railways) was not adequate in ensuring compliance to the rules and regulation for effective budgeting,” the report says. “Measures suggested by the ministry of finance were not addressed or provided due consideration while formulating budget. Non-observance of extant provisions led to adopting defective budgeting procedures which manifested in the form of incorrect assessment of funds,” it says.

Other observations made by the government auditor appear to be a vindication of charges that the railways ran on whim in those three years. “The basis adopted by the IR for projecting growth and variation in earnings as well as expenditure were not adequately assessed and documented. Moderation of estimates both at the zonal level and the Railway Board level were resorted to without recording logical reasons thereof,” the report points out.

The railways’ depreciation reserve fund and pension fund closed with negligible balances of Rs.5.05 crore and Rs.6.52 crore, respectively, in 2011-12, according to the report. The development fund closed with a negligible balance of Rs.4.73 crore in 2011-12, which was after obtaining a loan of Rs.3,000 crore from the finance ministry, while the capital fund closed with a negative balance of Rs 401.53 crore in 2011-12, the report noted.

“Though the fund balances improved by Rs.1,428.40 crore over the previous year balance of Rs.342.51 crore, the financial performance of IR remained poor in the current year. The meager/negative balances in reserve funds will adversely impact the safety aspects and future expansion of IR’s existing services,” the CAG says.

Trinamool spokesperson and Rajya Sabha MP Derek O’Brien pointed out that there was no allegation of wrongdoing in the report. “Considering what is coming up in CAG reports, and the scathing attacks it is making on institutions, this seems like vanilla ice-cream. We have just received a copy of the report tabled in the Lok Sabha. We will study its contents and reply if necessary. However, from whatever one has heard, there is not a single instance or insinuation of any wrongdoing.