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Five Reasons Why the Indian Railways Have Gone Off-Track

Elisha Vermani
Nov 22, 2023
Reports on the Railways published on various outlets point to a misuse of funds and its consistent inability to generate profits.

New Delhi: The Indian railways has been facing criticism for prioritising AC coaches over their sleeper counterparts, with concerns raised about poor maintenance and heightened scrutiny regarding accidents – the most recent one in Balasore being one of the most horrific in Indian history.

Here are five reasons why the Indian railways has been performing poorly:

1. Poor operating ratio

According to a report by the Comptroller and Auditor General of India (CAG), the finances of the Indian railways slipped into “concern zone” in 2021-’22 as it recorded its worst ever operating ratio of 107.39%. This means that during that year, the Railways spent more than Rs 107 to earn Rs 100.

While the government initially tried to blame the pandemic for the railways’ poor financial condition, a report in Scroll shows that the operating ratio worsened sharply around four years before the pandemic in 2016 and has stayed close to 100% since then.

“A closer look at the railways books shows that the failure to generate enough revenue surplus is the reason behind the poor shape of its financials,” the report notes. It highlights, with the help of numbers, how critical this failure has proven to be and how wide the deficit is.

2. Misuse of funds

Another CAG report from December 2022 showed that funds from the Rashtriya Rail Sanraksha Kosh (RRSK) – a special fund created by the Narendra Modi government in 2017 to improve railway safety – was spent on foot massagers, crockery, electrical appliances, furniture, winter jackets, computers and escalators, developing gardens, building toilets, paying salaries and bonuses and erecting a flag.

The fund should have received Rs 20,000 crore each year – with Rs 15,000 from the Union and Rs 5,000 from the railways’s revenues. However, over a four-year period, the Indian railways was only able to drum up Rs 4,225 crore – leaving a shortfall of Rs 15,775 crore in their contribution.

3. Poor maintenance

The national auditor has also pointed out that at the end of 2020-’21, the railways needed to replace old assets worth Rs 94,873 crore from the Depreciation Reserve Fund.

Of this, roughly 60% of the funds or Rs 58,459 crore were to be used for renewal of tracks. However, the CAG report says only Rs 671.92 crore or 0.7% of the funds were used.

This, when a 2015 white paper by the government said that 4,500 km of track should be renewed annually. Since then, this has not happened in a single year till at least 2021-’22.

4. Overcrowding

The Indian Railways has been systematically replacing Sleeper and Second Class coaches with AC coaches in various train services. A report in the Hindu noted that in four pairs of trains operating out of Mangaluru Central Railway Station, one Sleeper Coach each was replaced by an AC 3 tier Economy Class coach each in May this year. Subsequently, an AC 3 tier Economy Class coach was introduced in place of a general Second Class coach each in Bagmati Superfast Express, Rapti Sagar Superfast Express and Muzaffarpur Express in September.

Those holding an unreserved ticket to travel in General Coaches also may find it tough to get seats. With a relatively smaller share of people able to afford the higher costs of AC coaches, and in scenarios where alternative arrangements are not possible, incidents of general ticket holders making their way into reserved compartments have become common, the report said.

The report also said that zone wise comparison indicated a sharp rise in AC seats in the Central, Northern and Western Railways, while the rise in Southern and Eastern Railways was not that steep.

In July, senior officials of the railways told the Hindu that other than reduction in non-AC coaches, the discontinuation of the fully unreserved Jan Sadharan trains after the pandemic was also contributing to overcrowding. These trains were discontinued because of their unprofitability.

5. Lack of punctuality

The CAG noted that the number of mail and express trains that were punctual declined from 79% in 2012-’13 to 69.23% in 2018-’19.

More recently, the Times of India reported that the average speed of passenger trains in India had declined by more than 5 km per hour as compared to last year. For freight trains, the average speed fell by almost 6 km per hour.

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