(MENAFN- Live Mint) New Delhi: The Comptroller and Auditor General (CAG) of India has initiated a series of performance audits covering Indian Railways' multimodal logistics, digital procurement systems, green transport initiatives, and suburban train services.

Additional deputy CAG Pravir Pandey described it as one of the most comprehensive assessments of the national transporter in recent years. The move follows rising logistics costs and a renewed government focus on infrastructure efficiency under the PM Gati Shakti plan.

The audit on“multi-modal transport and logistics initiatives by Indian Railways” is aimed at examining whether the sector's investments and modernization efforts have translated into measurable cost reductions and improved freight mobility, said the CAG official said.

According to a National Council of Applied Economic Research (NCAER) study released in September 2025, India's logistics costs stood at 7.97% of GDP in FY 2023–24 but were substantially higher at 16.9% for micro, small and medium enterprises, reflecting structural inefficiencies in transport and warehousing.

Key Takeaways

• The Comptroller and Auditor General (CAG) of India has initiated a series of performance audits covering Indian Railways' multimodal logistics, digital procurement systems, green transport initiatives, and suburban train services.
• The audit on 'multi-modal transport and logistics initiatives by Indian Railways' is aimed at examining whether the sector's investments and modernization efforts have translated into measurable cost reductions and improved freight mobility.
• Under the National Rail Plan (NRP) 2030, Indian Railways has set a target to increase its freight modal share to 45% and raise the average speed of freight trains to 50 km per hour.
• The CAG has launched an IT audit of the Indian Railways e-Procurement System (IREPS), the digital platform handling all procurement activities across the rail network.
• The CAG has initiated an audit titled 'Sustainable Rail Transport: ESGs and Green Energy' to assess Indian Railways' progress toward achieving net-zero carbon emissions by 2030.
• A theme-based audit on 'Performance of Suburban Train Services' is also being conducted to evaluate service adequacy, safety, and efficiency in metropolitan regions.

Under the National Rail Plan (NRP) 2030, Indian Railways has set a target to increase its freight modal share to 45% and raise the average speed of freight trains to 50 km per hour. The CAG audit will assess whether the plan's goals of capacity creation, digital integration, and private participation under the Gati Shakti Cargo Terminal (GCT) policy have achieved desired outcomes, he said. As of August 2025, 115 of 132 approved GCTs have been commissioned.

Citing an example of coal supply to the Damodar Valley Corporation (DVC), from Dhanbad, Pandey said,“The Railways has not yet developed a direct rail link to the DVC depot, due to which coal extracted from the mines has to be first loaded onto trucks, then unloaded into railway rakes, and again transferred onto trucks before reaching the DVC plant in Chandrapura.

“This multiple handling leads to pilferage and loss of coal, which is an essential input for power generation. The additional logistics costs ultimately get passed on to consumers. The audit will examine such cases in detail and suggest corrective measures in line with global best practices.”

The audit will also review coordination among key ministries-railways; road transport and highways; ports; shipping and waterways; and department for promotion of industry and internal trade (DPIIT)-as multimodal logistics infrastructure requires the convergence of these sectors. With the government deciding to set up a new Gati Shakti Transport Planning and Research Organisation (GTPRO) for unified transport planning, the audit will evaluate the progress of inter-ministerial integration and data sharing.

Low rail share in freight

To ensure cross-sectoral coverage, the CAG has constituted an integrated audit group (IAG) comprising experts from railways, ports, and infrastructure audit divisions. The Railway Audit Wing, in consultation with the Indian Institutes of Management in Mumbai as its knowledge partners, has also held meetings with the Railway Board, logistics public sector units, port authorities, and private freight operators. The audit will span nine railway zones along the north–south and east–west freight corridors and is expected to be tabled in Parliament during the Monsoon Session of 2026.

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“The audit aims to evaluate whether Indian Railways' multimodal and logistics initiatives are translating into real-world efficiency gains and cost reductions,” said Pandey.“Given the scale of investments under the Gati Shakti and National Rail Plan frameworks, it is important to assess how well these initiatives are converging across ministries and modes of transport.”

The audit will examine the Railways' plan to increase its share in freight logistics from the existing 26% to 45% under the National Rail Plan.

Though railway logistics is cheaper than road and shipping, its share has remained stagnant at around 26%. The audit will examine these aspects and is expected to recommend that the Railways strengthen its existing mechanisms to achieve its target of increasing the freight share to 45%.

IT audit

Separately, the CAG has launched an IT audit of the Indian Railways e-Procurement System (IREPS), the digital platform handling all procurement activities across the rail network. The audit will examine governance structures, IT controls, and compliance with financial and administrative rules. Preliminary reviews have flagged delays in module rollouts, weak project monitoring, inadequate documentation, and user accounts remaining active post-retirement.

The audit will also look into potential tendering irregularities, such as collusion or dummy bidding from identical IP addresses, and assess adherence to MSME procurement norms and Government e-Marketplace (GeM) guidelines. The findings are expected to underscore the need for stronger IT governance, data integrity, and enforcement of e-procurement standards to enhance transparency and efficiency in public spending, he said.

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In another major exercise, the CAG has initiated an audit titled“Sustainable Rail Transport: ESGs and Green Energy” to assess Indian Railways' progress toward achieving net-zero carbon emissions by 2030. The audit will review the adoption of solar and wind power, electrification of lines, green building standards, and renewable energy usage under the ESG framework, he said. It will also evaluate transparency in reporting, ethical procurement practices, and innovation in sustainability management. The audit will cover five zones-Northern, East Coast, Western, South Central, and South East Central-and three PSUs, including the Dedicated Freight Corridor Corporation of India Limited (DFCCIL), the Indian Railway Catering and Tourism Corporation (IRCTC), and Konkan Railway.

Suburban rail

A theme-based audit on“Performance of Suburban Train Services” is also being conducted to evaluate service adequacy, safety, and efficiency in metropolitan regions, he said. The review will cover issues such as overcrowding, train punctuality, connectivity with metro and bus systems, and safety infrastructure. It will also examine the implementation of passenger security measures such as CCTVs, metal detectors, and women-only coaches, as well as amenities like first-aid rooms and emergency response systems.

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The suburban audit will additionally assess compliance with earlier Public Accounts Committee recommendations and CAG's 2016 report on suburban operations, while studying measures taken to reduce accidents and trespassing fatalities. The CAG official said the exercise is expected to identify gaps in passenger comfort, safety, and cleanliness, and propose steps for developing a dedicated organisational setup to manage suburban services. It is expected to be completed by the Winter Session of 2026.

Together, the audits represent a major institutional effort to measure Indian Railways' performance on multiple fronts-cost efficiency, digital governance, sustainability, and commuter services. The findings are expected to guide future policy decisions and strengthen accountability as the government pushes toward a logistics-efficient, greener, and digitally driven railway system by 2030.

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