A recent audit by the Comptroller and Auditor General of India (CAG) has exposed significant lapses in the Indian Railways' efforts to generate non-fare revenue, primarily through the commercial development of its vast land bank and the recovery of substantial dues from private entities.
Rail Land Development Agency's Poor Performance
The CAG audit focused on the performance of the Rail Land Development Agency (RLDA) between the financial years 2018-19 and 2022-23. The RLDA is the dedicated railway entity responsible for developing surplus railway land for commercial use to boost revenue.
The audit revealed an alarming underutilisation of available land. As of March 2023, the Indian Railways owned a massive 4.88 lakh hectares of land. Out of this, a significant portion—62,740 hectares—was lying vacant. However, the Railway Board entrusted only a minuscule fraction, just 997.8 hectares or 1.6% of the vacant land, to the RLDA for development.
During the audit period, the Railway Board received 188 proposals for developing 657 hectares. It forwarded only 59 of these proposals to the RLDA. Ultimately, the RLDA managed to award a mere 35 sites to developers. More critically, the agency could award only 8.8% (87.76 hectares) of the land entrusted to it for actual development by March 2023.
Systemic Issues Hampering Monetisation
The CAG identified deep-rooted systemic and operational problems that crippled the land monetisation process. It found that several land parcels were handed over to the RLDA despite having unresolved issues like unclear land titles, encroachments, and other legal encumbrances. This directly led to the non-monetisation of these sites.
The report strongly criticised the Railway Board for not ensuring that land was free from such problems before entrusting it to the RLDA. It pointed to weak inter-agency coordination within the Indian Railways as a major cause for delays. In a damning observation, the CAG stated, "Alarmingly, none of the awarded commercial sites were developed as of March 2023."
Massive Unrecovered Dues from Private Sidings
In a separate but related report, the national auditor highlighted a major failure in revenue recovery. Different railway zones failed to recover outstanding dues amounting to a staggering Rs 4,087 crore from 269 private siding owners as of March 2023.
Private sidings are dedicated railway lines built by companies on railway land to connect their factories or plants to the main rail network. The accumulation of such a huge unpaid amount points to severely weak monitoring and enforcement mechanisms within the railway's administration.
Recommendations for Course Correction
The CAG has recommended a series of measures to the railways to address these critical issues. For land monetisation, the emphasis is on improving inter-departmental coordination, ensuring clear titles before land transfer, and strengthening the project execution capabilities of the RLDA.
Regarding the recovery of dues, the auditor has urged the railway zones to implement robust tracking and enforcement systems to ensure timely collection from private siding owners. The reports collectively underscore an urgent need for the railways to overhaul its approach to managing its non-fare assets and revenue streams to improve its financial health.
