FINANCIAL STRUCTRE OF INDIAN RAILWAYS. Sanjay upreti PAM

FINANCIAL STRUCTRE OF INDIAN RAILWAYS. ACCOUNTAL OF MONEY EXPENDITURE ACCOUNTAL REVENUE EXPENDITURE WORKS EXPENDITURE EARNINGS ACCOUNTAL

1. HOW EARNINGS ARE ACCOUNTED ACCOUNTAL OF MONEY 1. HOW EARNINGS ARE ACCOUNTED COLLECTION AT THE STATIONS SENDS THE MONEY TO THE CASH OFFICES DEPOSIT AT THE BANK BANK ADVICES RBI/NGP RBI/NGP CREDITS/INCREASES THE RLY.’S ACCOUNT

2. HOW EXPENSES ARE ACCOUNTED ACCOUNTAL OF MONEY 2. HOW EXPENSES ARE ACCOUNTED RBI/NGP DEBITS/REDUCES RLY.’s ACCOUNT CHEQUE ISSUED BY RLY. CHEQUE DEPOSITED IN BANK BY THE PARTY BANK GIVES MONEY TO THE PARTY AND ADVICES RBI/NGP.

FINANCIAL STRUCTURE OF RAILWAYS. RELATIONSHIP WITH THE GoI & RELATIONSHIP WITH THE GoI EARNINGS CFI WORKS EXP. REVENUE EXP./ WORKING CAPITAL BUDGETARY ALLOCATION

Commercial Accounting Para 201 of A-1 Commercial Accounting is done in a manner so as to show: How capital is utilize. Its standing with debtors and creditors. Whether it is gaining or losing. The reasons for loss and gain. Whether it is solvent or insolvent.

Government Accounts Para 201 of A-1 The main requirement of government accounting is to prepare a systematic record of receipt and expenditure. Indian Railways is a DEPARTMENTAL COMMERCIAL ENTERPRISE. Thus we maintain accounts on commercial basis as well as government basis and then link the two through link accounts.

Accounts prepared for the government are called “ Finance Accounts”. Para 202 & 205 of A-1 The accounts of a Railway prepared as in a commercial unit are known as “Capital and Revenue accounts”. Accounts prepared for the government are called “ Finance Accounts”. To facilitate the preparation of finance accounts a detailed structure of accounts has been developed which synchronies with the government of India Accounting.

CLASSIFICATION / STRUCTURE OF ACCOUNTS WHAT IS IT? A DETAILED SCHEME OF RECORDING ACCOUNTS NEED FOR IT? INFO/DATA - MEANINGFUL REPRESENTATION HELPS ANALYSIS ENABLES - DECISIONS BASED ON COMPARISONS COST CONTROLS BUDGETING FORECASTS

REVENUE EXPENDITURE DEFININTION COMPONENTS 1. ORDINARY WORKING EXPENSES (Para 324 of F-1) 2. OTHER MISC. EXPENSES. 3. APPROPRIATION TION TO FUNDS FROM WHERE DO WE GET MONEY FOR REVENUE EXPENSES? Relevant References ( Page 1 & 2 of A-2 & Para 701 of F-2)

DEMANDS FOR GRANTS 1. Railway Board makes policies 2. Miscellaneous expenditure common to all 3. RAILWAY ADMINITRATION maintains 4. BUILDINGS & TRACKS to run 5. LOCOMOTIVES and 6. CARRIAGE by using 7. PLANT & EQUIPMENTS to operate 8. ROLLING STOCK by 9. TRAFFIC DETARTMENT using 10.FUEL and earn money for 11. STAFF WELFARE and 12. MISCELLANEOUS EXPENSES. 13. PF, Pension & other retirement benefits. 14. Appropriation to funds. DRF,Pension 15. Dividend, Repayment of loan etc. 16. Works expenditure. FROM 1 TO 12 OWE . 1 TO 14 TWE 1 TO 15 REVENUE EXP 1 TO 16 TOTAL

EACH DEMAND IS DIVIDED INTO : MINOR HEAD SUBHEAD DETAILED HEAD PRIMARY NO. THUS EXP. CLASSIFICATION WILL BE 04 220 32 DEMAND No. DETAILED HEAD PRIMARY UNIT

CLASSIFICATION OF WORKS EXP. PLAN HEAD--- MINOR HEADS 24 TILL 1999 AFTER WHICH 2 NEW HAVE BEEN ADDED--- ROB & RUB UNDER SAFETY WORKS. Thus in all 26 plan heads exists. e.g. DRF- 2114-09 PROCUREMENT OF ELEC. LOCO

WORKS EXPENDITURE DEFINITION Rules for classification of expenditure under the various heads are given in chapter 7 of F-1 FROM WHERE DO WE GET MONEY FOR WORKS EXPENDITURE. DRF REVENUE DF SURPLUS CAPITAL FUND MONEY FROM EXCHEQUER CAPITAL

WHILE GIVING ALLOCATION OF WORKS EXPENDITURE WE GIVE SOURCES OF FUND & THEIR APPLICATION CAP.,CAP.FUND,DRF, DF, PLAN HEAD LIKE DOUBLING, S&T ETC.

DRF STARTED FROM 1.4.1924 PROVIDES FOR COST OF REPLACEMENT OF ASSETS. AMOUNT ON THE BASIS OF RCC’s RECOMMENDATIONS. SUBJECT TO VOTE OF PARLIAMENT FOR 2001-2002 Appropriation to DRF has been Budgeted at Rs.2804 Crores and withdrawal from the fund is kept at 2704 Crores..

DF STARTED IN 1946---- BETTERMENT FUND AND RENAMED AS DF FROM 1.4.1950. IT IS OF 4 TYPES TYPES DFI PASSENGER AMENITIES DF II LABOUR WELFARE DF III UNREMUNERATIVE WORKS FOR OPERATIONAL EFFICIENCY DF IV SAFETY WORKS The appropriation to and withdrawal from the fund for the year 2001-2002 has been kept at Rs. 511 crores.

CAPITAL FUND CREATED IN 1992-93 ALL EXCESS AFTER APPROPRIATION TO DF IS CREDITED TO THIS. WITH A VIEW TO CREATE INFRASTRUCTRE FROM INTERNAL RESOURCES. NOW OF NOT MUCH USE The appropriation to and withdrawal from the fund for the year 2001-2002 has been kept at Rs. 17.43 crores.

RULES OF ALLOCATION EARNINGS ABSTRACT X - COACHING EARNINGS PASSENGER FARES, LUGGAGE CHARGES, PARCEL COLLECTIONS, LIVE STOCK BY PASSENGER TRAINS ETC. ABSTRACT Y - EARNINGS FROM GOODS TRAFFIC, GENERAL MERCHANDISE, COAL, FERTILIZERS, LIVESTOCK BY GOODS TRAINS, TRANSHIPMENT CHARGES ETC.

ABSTRACT Z - SUNDRY OTHER EARNINGS, COLLECTION OF RETIRING ROOM CHARGES, RECEIPTS FROM CATERING DEPT., SALE PROCEEDS OF TREES AND GRASS ON LINE, RENT OF PLOTS GIVEN TO OUTSIDERS, TELEGRAPH EARNINGS ETC.