Expressing concerns over the financial position of Railways, the Comptroller and Auditor General (CAG) has recommended rationalising of freight and passenger tariffs to improve its finances.

The premier auditing body also pressed for making quick decisions about unviable projects and increasing focus on more viable projects.

"The way forward for Indian Railways to improve its finances is to rationalise both freight and passenger tariffs through some form of pre-determined non discretionary inflation indexing," the CAG said in its 2010-11 report tabled in Parliament today.

Holding that the surplus of just Rs 75 lakh during 2009-10 reflected an impending financial crisis, it also suggested increasing market share in bulk freight where Railways has an inherent competitive advantage.

"Efforts are required to enhance capacity in such a way that the growing demands are satisfactorily met," it said, adding that the public transporter may consider approaching the Government for crediting dividend paid it to a non-lapsable fund to be used for financing network augmentation projects.

The Railways further needs to review all cases of licencing and renting of its assets for timely revision and raising of bills, it said.