Railways 'turnaround' questioned

New Delhi : The financial position of the Indian Railways does not show as much profit as was officially shown during the five-year tenure of Lalu Prasad as minister, says an official report released yesterday.

The white paper, tabled in parliament by Railway Minister Mamata Banerjee, says changes were made in the accounting procedures during Prasad's tenure to show questionable cash surpluses.

The white paper also says excessive money was charged for new schemes such as instant 24 hour advanced pre-booking (tatkal), while efficiency and train punctuality took a beating during Prasad's tenure.

"There were two accounting changes and these have contributed significantly in inflating the figures of ‘cash before surplus dividend' — a new way of portraying surpluses generated, introduced in 2007-08," the report says.

Other changes in procedures inflated the figure for cash surplus before dividend by Rs17,006 crore (Dh12.8 billion), however, proper treatment of the Pay Commission report would have reduced the surplus by Rs26,206 crore, it says.

This apart, but for the introduction of another new concept called "investable surplus", the cash surplus would have been further eroded by Rs23,584 crore, the white paper adds.

Lalu Prasad had claimed a cash surplus of nearly Rs90,000 crore during his tenure as railway minister, saying he had managed to turn around the same Indian Railways which experts said was heading towards financial disaster.

This feat had earned him praise from both within and outside the country and even became case studies at the Harvard Business School and the Indian Institute of Management at Ahmedabad, among other institutions, where he was also invited to lecture.

"Indian Railways, like other railways in the world, and particularly the bigger railways, have been facing the problem of declining market share in comparison with others transportation mode," says the white paper.