The CAG has finalised its report after surveying of 80 trains across 74 stations.
"Due to frequent policy changes, Indian Railways could not take effective steps to bridge the gap to provide necessary infrastructure in terms of base kitchens, static catering units, trains side vending arrangements and automatic vending machines etc", the audit report said.
The auditor pulled up the Railways for mismanagement of catering services, poor quality food and monopolisation that has led to compromise in quality. At the same time, passengers are not billed for their food, while eating quality also has many drawbacks. The audit noticed that cleanliness and hygiene were not being maintained at catering units at stations and in trains.
The country's top auditor in its report has pointed out several loopholes in managing the catering services provided by the Indian railways, which ferries around 22 million passengers daily.
"The verification of records of six PSPs (private service providers) by audit indicated total understatement of adjusted gross revenue (AGR) of Rs 61,064.56 crore by the six telecom companies", CAG said.
It said: "Cleanliness and hygiene were not being maintained at catering units at stations and in trains".
"As per the Complaint book available at onboard catering service in Train No. 12033-34 (Kanpur-New Delhi-Kanpur Shatabdi) of NCR, a complaint of iron nail in the breakfast was made". They were surprised to see that food stuff were not covered to protect them from flies, insects and dust, rats and cockroaches were found in trains etc. Checks and controls prescribed for check of quality were not used effectively.