At a time when the pompous claims of a financial turnaround of the Indian Railways made during former Railway Minister Lalu Prasad Yadav tenure are under the scanner, the way the Railway Ministry fleeced passengers for over two years too is being questioned.

In its latest report, the Comptroller and Auditor General (CAG) of India has pointed out that the Railway Ministry, despite discontinuing the levy of the safety surcharge from April 1, 2007, collected the same amount in the form of a “development charge” to fund the Dedicated Freight Corridor (DFC). The Indian Express had first reported on the move in 2007.

While discontinuing the surcharge would have cut passenger fares by Re 1 to Rs 100 in different classes, Railway, by including it as development charge, ensured that passengers paid the same surcharge under a different name.

During Nitish Kumar’s term as Railway Minister, the government had set up a non-lapsable Rs 17,000 crore Special Railway Safety Fund (SRSF) in 2001-02 to wipe out the arrears of replacement and renewals of vital safety equipment by 2006-07. While Rs 11,965 crore for the SRSF had to come through dividend-free financial aid from the general revenue, the remaining Rs 5,035 crore were to be generated by Railways through levy of a safety surcharge on passenger fares. Thus, Railways began levying the surcharge starting 2001-02.

As the levy of this safety surcharge was to end on April 1, 2007, the Ministry, in September 2006, mooted a proposal that safety surcharge, being a part of passenger fare, should be recognised as Railway Revenue under Major Head 1002-03 Indian Railways Revenue Receipts. “However, this proposal was not accepted by Ministry of Finance as well as Controller General of Accounts on the ground the ‘Safety Surcharge’ cannot become an operational receipts of the Railways, as they are not from normal operations of Railways and its continuation beyond March 31, 2007 would require the approval of the Cabinet,” the CAG report has said.

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