CAG finds Indian Railways resorting to window dressing

As per a report by the Comptroller and Auditor General (CAG), Indian Railways (IR) has resorted to window dressing so as to show its working expenses and operating ratio (OR) in a better light. The OR signifies the amount spent out of every rupee earned. Over the past few years, IR’s OR has been high indicating its poor ability to generate revenues. Further, the CAG has also pointed out that IR has not taken financially sound investment decisions. The national transporter borrowed funds from the market to invest in projects that did not generate sufficient revenues. It borrowed funds through the Indian Railway Finance Corporation, its dedicated borrowing arm. In the past few years, these borrowings also increased to bridge the gap between revenues and expenditure. Besides, the criteria for exclusion of projects with pending land acquisition were also not followed.