FINANCIAL STRUCTRE OF INDIAN RAILWAYS.
Sanjay upreti
PAM
FINANCIAL STRUCTRE OF INDIAN RAILWAYS.
•ACCOUNTAL OF MONEY
•EXPENDITURE ACCOUNTAL
•REVENUE EXPENDITURE
•WORKS EXPENDITURE
•EARNINGS ACCOUNTAL
ACCOUNTAL OF MONEY
1. HOW EARNINGS ARE ACCOUNTED
COLLECTION AT THE
STATIONS
DEPOSIT AT THE BANK
BANK ADVICESRBI/NGP
RBI/NGP CREDITS/INCREASESTHE RLY.’S ACCOUNT
SENDS THE MONEYTO THE CASH
OFFICES
ACCOUNTAL OF MONEY
2. HOW EXPENSES ARE ACCOUNTED
CHEQUE ISSUEDBY RLY.
CHEQUE DEPOSITEDIN BANK BY THE
PARTYBANK GIVES MONEY TO
THE PARTY AND ADVICESRBI/NGP.
RBI/NGP DEBITS/REDUCES RLY.’s ACCOUNT
EARNINGS CFI
WORKS EXP.REVENUE EXP./
WORKING CAPITAL
BUDGETARY ALLOCATION
FINANCIAL STRUCTURE OF RAILWAYS.
&
RELATIONSHIP WITH THE GoI
Commercial AccountingPara 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 AccountsPara 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.
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
COMPARISONSCOST CONTROLSBUDGETINGFORECASTS
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 using10.FUEL and earn money for11. STAFF WELFARE and12. MISCELLANEOUS EXPENSES.13. PF, Pension & other retirement benefits.14. Appropriation to funds. DRF,Pension15. Dividend, Repayment of loan etc.16. Works expenditure.
FROM 1 TO 12OWE .
FROM 1 TO 14
TWE
FROM1 TO 15
REVENUEEXP
FROM1 TO 16TOTAL
EXP
S U B - D IV IS IO N S O F R E V E N U E D E M A N D S
M IN O R H E A D
D E A TIL E D H E A D D E A TIL E D H E A D
S U B H E A D S U B H E A D
D E A TIL E D H E A D D E A TIL E D H E A D
S U B H E A D
M IN O R H E A D M IN O R H E A D
D E M A N D N O
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.
SURPLUS
REVENUEDRF
DF
CAPITAL FUND
CAPITALMONEY FROM EXCHEQUER
WHILE GIVING ALLOCATION OF WORKS EXPENDITURE
WE GIVE
SOURCES OF FUND
&
THEIR APPLICATION
CAP.,CAP.FUND,DRF,DF,
PLAN HEADLIKE 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 IIIUNREMUNERATIVE WORKS FOR
OPERATIONAL EFFICIENCY• DF IVSAFETY 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.