The Comptroller and Auditor General highlights how budgetary reliance on lease repayments and slow progress on safety projects threaten the future of Indian Railways, raising questions over financial discipline and infrastructure funding.
The Comptroller and Auditor General has criticised Indian Railways for leaning on budgetary grants to repay lease charges to the Indian Railway Finance Corporation, saying the practice weakens the system’s ability to fund new infrastructure. In financial year 2024-25, the Ministry of Railways used ₹22,699 crore from gross budgetary support to meet the capital component of those lease payments, rather than drawing on the Capital Fund, which is normally fed by revenue surplus.
According to the audit report, the entire principal element of the lease charges was paid from gross budgetary support because the Capital Fund did not have enough surplus. The watchdog said that was not a healthy trend because it diverts money that could otherwise have gone towards capital works, reducing room for investment in the network.
The report also pointed to slow progress on safety projects funded through the Rashtriya Rail Sanraksha Kosh, the special rail safety fund created to support critical works. It said 22,350 fully funded projects were taken up under the scheme, but 8,334 were still under way, while 28,340 partially funded projects left 11,970 still in progress. The CAG said the unfinished backlog of safety-related works exposed railway operations to risk and suggested planning and execution weaknesses within the administration.
The audit further said Railways remained heavily reliant on coal freight and continued to cross-subsidise passenger and other coaching services from freight income. It added that Indian Railways met only 21.30% of its intended internal contribution to the safety fund in the first five years, or ₹5,324.62 crore against a target of ₹25,000 crore. Separately, unsanctioned expenditure jumped 113% in 2024-25 to ₹19,458.25 crore across 1,321 cases, equal to 2.55% of total railway spending, underscoring persistent concerns over financial discipline.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
