Indian Railway Codes and Manuals-Finance code-Vol-I-Chapter- 3 (III)
CHAPTER III
Budget Section I-General
301.
Budget - A Constitutional and
Management Document -Article 112(1) of the Constitution of India prescribes
that 'the President shall in respect of every financial year cause to be laid
before both the Houses of Parliament a statement of the estimated receipts and
expenditure of the Government of India for that year‘ referred to as the
"annual financial statement" and popularly called the "Annual
Budget". Though the constitutional requirement is only that the 'financial
statement' shall contain a statement of the estimated receipts and expenditure
for the coming financial year, as a matter of practice, every budget contains
three elements
a)
a review of the preceding year, including the actual receipts and expenditure
in that year;
b)
an estimate of the receipts and expenditure of the coming year; and
c)
proposals, if any, for meeting the requirements of the coming year.
Though
the Constitution does not provide for the presentation of the annual financial
statement or Budget in parts, the Rules of Procedure of Parliament have
provided that 'nothing shall be deemed to prevent the presentation of the
Budget to the House in two or more parts and when such presentation takes
place, each part shall be dealt with in accordance with the rules as if it were
the Budget'. This provision had enabled the Separation of the Railway Budget
from the General Budget and the passing of separate Appropriate Acts for each
of these Budgets in keeping with the Separation Convention (1924). With effect
from 2017-18, Railway Budget has been merged with the General Budget and hence
the Demand for Grant and the Statement of Budget Estimates of Ministry of
Railways has become an integral part of the General Budget presented by the
Finance Ministry.
302.
Voted and Charged Expenditure
-Article 112(2) of the Constitution prescribes that the estimates of
expenditure embodied in the annual financial statement shall show separately
a)
the sums required to meet expenditure charged upon the Consolidated Fund of
India ; and
b)
the sums required to meet other expenditure proposed to be made from the
Consolidated Fund of India. 4 The expenditure proposed in the Budget may,
therefore, be either (i) Voted. or (ii) Charged. Article 113(1) of the
Constitution provides that 'the estimates of expenditure charged upon the
Consolidated Fund of India shall not be submitted to the vote of Parliament'.
There is, however, no restriction on either House of Parliament discussing any
of these estimates, where after funds are sanctioned by the President. Article
113(2) requires that estimates of voted expenditure "shall be submitted in
the form of demands for grants to the House of the People (Lok Sabha) and the
House of the People shall have power to assent, or to refuse to assent, to any
demand, or to assent to any demand subject to a reduction of the amount
specified therein". Article 113(3) enjoins that no demand for a grant
shall be made except on the recommendation of the President.
303.
Charged Expenditure -In
respect of Railways, the following expenditure is "charged" on the
Consolidated Fund of India
i)
The salary, allowances and pension payable to or in respect of the Comptroller
and Auditor General of India;
ii)
Any sums required to satisfy any judgement, decree or award of any Court or
awards by Arbitrators where made into rule of court; and
iii)
Any other expenditure declared by the Constitution or by Parliament by law to
be so charged.
304.
Apart from its significance as an instrument of Parliamentary financial
control, the Budget is an important management tool. Broadly the financial
forecast in the Budget is related to the performance targets set for Railway
Administrations, and it is the responsibility of the Railway Managements to
ensure the achievement of these associated targets.
305.
Demands For Grants The proposals of Government in respect of sums required to
meet expenditure from the Consolidated Fund of India are to be submitted in the
form of "Demands for Grants" to the Lok Sabha. The Demands shall be
for gross expenditure; the credits or recoveries (vid paragraph 335) being
shown in the form of footnotes to Demands.
306.
Pursuant to the recommendations of Railway Convention Committee 1971, a Task
Force was constituted by the Government in July 1973 to examine certain aspects
5 of budgetary, accounting and management practices on the Railways. In their
First Report the Task Force made recommendations for the restructuring of the
Formats and Contents of Demands for Grants and the manner in which the Railway
Budget should be prepared. The recommendations made by the Task Force alongwith
Government's decisions thereon have been considered by the Estimates Committee
(1978-79) (Sixth lok Sabha); and the Formats and Contents of Restructured
Demands for Grants effective from 1 st April, 1979 and as further modified with
effect from FY 2017-18 after merger of Railway budget with Union Budget are
given in Annexure I. There is a single Demand for Ministry of Railways after
merger of Rail Budget with Union Budget with effect from FY 2017-18. The
salient features of restructured Demands for Grants are as under :-
i)
The single Demand for Grant is classified into Revenue and Capital Segments.
The Grant is divided into various Major Heads and in case of Revenue Segment
Major Heads are further divided into various Sub Major Heads (SMH).
ii)
Expenses are broadly grouped by activities as an aid to developing budgets and
analysing actual expenses against budgetted expenses.
iii)
Each Major Head/Sub Major Head has two-way classification by activity and by
Primary units of expenditure. The activity classification identifies 'why' an
expense item is incurred. The behavior of costs in relation to changes in
traffic volumes at each activity location thus provides a data base for
revising the budget in response to changing volumes of output. The primary unit
(object) of expenditure on the other hand, identifies 'what' the expense item
denotes, i. e., by way of labour, materials etc. Such a breakdown facilitates
concurrent cost and budgetary control for it pin points the types of expenses
on which the organisational unit should concentrate to improve its performance.
The primary units also indicate the categories of expenses that would be used
by any organisational unit to prepare its budget and monitor the variances from
the norms set up by it.
iv)
The Budget classifications have been completely aligned with the Accounting
classifications.
The
system is simple in structure and is intended to exploit fully the capabilities
of IT Applications such as IPAS etc. to analyse revenue expenses by activities
for management /parliamentary reporting and by primary units for expenditure
control at the responsibility cost centres where the expenditure is incurred.
For Works Expenditure, the classification provides a direct link-up with the
Plan heads. The functional orientation of both the Budgetary Demands for Grants
and the 6 accounting classification ensures a complete concordance between the
subheads of the Demand for Grants and minor heads of accounting classification
on the one hand and the detailed activity classification of the Demands for
Grants with the Sub heads of Accounting Classification on the other.
v)
Ministry of Railways is required to lay the Detailed Demands for Grants in Lok
Sabha after the General Budget is presented to Parliament. Major Head wise
details of Zonal Railway-wise/Spending Unit is circulated among Railways for
their working. The Detailed Demand for Grants and the Zonal wise break-up of
Detailed Demand of Grants will have the following sub divisions:
a)
Minor Heads of the Sub Major Heads representing major functions/activities.
b)
Sub heads representing a further break-up of the activity of classification
i.e. identifying ‗why‘ of the expenditure in greater detail.
c)
Primary Units (Objects of Expenditure) identifying 'what' the expenditure
denotes i.e.— Salary Wages, Allowances Materials Contractual Payments, etc.
vi)
The activity classification combined with the accounting by primary units of
expenditure provides a built-in mechanism for isolating fixed costs like
general administration and permanent sanctioned labour from variable and
semi-variable costs like cost of materials, cost of temporary labour, travel
expenses, incentive, running allowances etc. The scheme is however, by no means
such as to correlate expenditure directly with units of performance.
307.
The authorities responsible for control over expenditure against budget
provision in each Major Head/Sub major Head are given in Annexure I.
For
the laying of the Detailed Demands for Grants (preparation of the Budget) by
the Ministry of Railways (Railway Board), the Railway Administrations and other
authorities empowered to incur expenditure are required to submit to the
Railway Board their revised estimates for the current year and budget estimates
for the following year.
Since
the Railway Budget is finalized by the Ministry of Finance (MoF), the Budget 7
calendar being followed by Railways has to be in line with the schedule
notified by the MoF. For finalizing the Revised Estimates /Budget Estimates,
MoF hold discussions with various Ministries/Departments from middle of October
to first week of November.
Revenue
Section (Major Head 3001 3002 & 3003) (Sub Major Head 1 to 11) |
20th September
|
Estimates for
Traffic Plan and Revenue Receipts (Major Head 1001 1002 & 1003) |
20th September
|
Civil
Estimates/Demands |
20th September
|
Capital
Section (Major Head 5001 & 5002) |
25th September |
In
view of the above, Revised Estimates for the current year and Budget Estimates
for the next year need to be finalized by the Board by mid of October itself.
Accordingly, the Revised Estimates/Budget Estimates are required to be submitted
to the Board as per the due dates and procedure:
Note
-Timeline given above is subject to change as per the instructions issued by
Railway board every Year.
The
revised estimates are required in respect of the current year and Budget
Estimates for the following year. The forms in which the estimates should be
prepared are furnished each year by the Railway Board to the authorities
concerned and the instructions for the filling up of the forms are printed on
the back thereof. A list of the Budget Forms is at Annexure II.
308.
Glossary of terms used-The following is a glossary of the terms which the
Railway Administrations should use in their estimates and other connected
documents. The terminology given in the glossary should be followed uniformly
by all Railway Administrations and no departure should be made there from in
any circumstances:
“See
Table”
Section II -Preparation Of Budgets By Railway Administrations.
309.
Responsibility for framing the Estimates
- Preparation of the Revised and Budget Estimates should commence at the 'grass
root level ‘, i.e., Division, Workshop, Stores Depot etc., as the case may be.
The entire responsibility for framing the estimates devolves upon the
spending/earning authorities concerned, though the actual 9 work of compilation
and scrutiny would rest with the Financial Advisor & Chief Accounts Officer
who would also draw the attention of the General Manager to matters of purely
financial import.
310.
The estimates should be as accurate as possible and, to achieve this object,
care should be taken to see that the data on which the forecast is based is
adequate and reliable and that the conclusions arrived at from the data can be
sustained by past experience and future expectations of likely events.
311.
No stereotyped method of estimating will be helpful in forecasting accurately,
unless the data on which the forecast is based is selected with due care and
all the useful knowledge is brought to bear on the conclusions to be derived
from the data. The manner in which the data required for the preparation of the
estimate should be collected is, therefore, left to the General Managers, but
the general principles on the basis of which the various estimates should be
framed are described, wherever necessary, in the following paragraphs.
312.
The Revised and Budget Estimates should be framed by the various concerned authorities
in keeping with the instructions given below separately for
i)
Gross Receipts ;
ii)
Ordinary Working Expenses;
iii)
Payments to Worked Lines ;
iv)
Appropriation to and expenditure to be met out of Railway Funds ;
v)
Works Expenditure ; and
vi)
Civil Estimates
Gross
Receipts
313.
The estimates of Gross Receipts are required in the format given in the form
(item (1) of Annexure II) and should be submitted after compilation in the
Budget Module in IPAS or accounting software, the various figures being given
in thousands of rupees. Information should be furnished in accordance with the
instructions printed on the reverse of the form (item (1) of Annexure II). Two
sets of the estimates of Revenue should be prepared, one on the basis of
originating Revenue and the other with reference to apportioned Revenue. The
two sets of figures should be sent to the Railway Board both for the Revised
Estimates for the current year and the Budget Estimates for the following
year.
314.
Coaching Revenue: Revenue from
each class of passenger traffic viz., Air conditioned , First and Second,
should be estimated on the basis of passenger kilometres and the average fare
per passenger kilometre for each class separately. The Revenue from parcels
traffic should be estimated in the same way as for goods traffic, and from
military traffic should be assessed on the basis of the previous actuals and
the influence of changing conditions in the future. The Revenue from coaching
traffic, other than passenger, parcel and military traffic, may be estimated on
the basis of a ratio of the Revenue from passenger traffic to be determined
with reference to the previous actuals.
315.
Goods Revenue- Estimate for
the commodities which, yield the bulk of the Railway's revenue, should be based
on the anticipated net tonne kilometres (NTKM) to be carried, and the average
yield per NTKM, for each commodity. The Revenue from the rest of the
commodities should be assessed in lump sum, based on the trend of events in the
immediate past, the experience of the past years and, so far as it is possible
to ascertain, the influence of changing conditions in the future.
316.
Sundry Revenue -The
miscellaneous Revenue of a railway is derived mainly from the following
sources:-
i)
Operating loss of strategic lines as reimbursed by Ministry of Finance
ii)
Rent and tolls ;
iii)
Commercial Publicity;
iv)
Land Lease, Land Monetization/Property Development;
v)
Right of way for OFC laid by/for Rail Tel & Right of way /way leave
facility for others;
vi)
Receipts from car/scooter/cycle parking at stations/Railway premises;
vii)
Advertisement fees & Non-Fare Revenue activities;
viii)
Catering;
ix)
Sale proceeds of grass and trees, damaged goods and unserviceable revenue
scrap; and
x)
Interest and maintenance charges on account of assisted sidings, saloons,
postal vehicles, etc.
xi)
Other Misc. Sundry Revenue The Revenue from these sources is comparatively
small and should be estimated on the basis of previous actuals and any other circumstances
that may be known or foreseen at the time.
317.
Receipts of Worked Lines –The
receipts of worked lines should be included in the 11 receipts of the main
lines under the several sub-heads and also the total should be shown separately
in the estimates.
318.
Refunds of Revenue –The
figures of refunds of revenue should be deducted from the estimated receipts
under each sub-head and the figures for gross receipts should be given net
(after deduction of refunds).
319.
Explanation of variations in receipts
- The estimates should be accompanied by a brief narrative explanation of the
figures of actual Revenue for the first seven months of the current year,
especially if they show any pronounced change from those for the corresponding
period of the preceding year. For example, if the Revenue from second class
traffic have risen or fallen markedly, the narrative explanation should state
what, in the General Manager's opinion, is the reason for so large a change in
the number of passengers carried or the average distance travelled by them; if
goods traffic in certain commodities has been exceptionally brisk or dull, the
commodities affected should be specified, and so on. Similar explanations
should be given of the figures adopted by the General Manager for the revised
estimate for the remaining period of the current year, and for the budget
estimates for the ensuing year.
320.
The estimates of Revenue under each category should be shown separately for
"local" and "interchanged" traffic and an analysis furnished
indicating the trend of realisation in the current year as compared to the
previous year. It must be ensured that figures for interchanged traffic take
into account the latest position of both "outward" and
"inward" transactions and the period upto which the revenue has been
realised should, also be indicated. The Railway-wise details of the
realisations/ anticipated realisations, indicating also the period upto which
these relate, should be furnished. Judicious and purposeful use should be made of
the periodic statement of approximate Revenue on originating basis as well as
of the monthly digest of current trends in economic conditions of Railway
Transport circulated to the Railway Administrations by the Director, Statistics
and Economics, Railway Board.
321.
The estimates of originating goods traffic (in tonnes) based on the actuals of
the first five months and expectations for the last seven months of the current
year should be given separately for
(i)
traffic moved to and from the steel plants by principal categories (other than
coal) such as raw materials, finished products like steel manufactures, pig
iron and alloy steel,
(ii)
Coal for Steel Plants, Washeries, and other users,
(iii)
Cement,
(iv)
Export ore,
(v)
Fertilisers,
(vi)
POL products,
(vii)
Food grains, and
(viii)
General Goods. The increase/decrease anticipated in the originating tonnage 12
during the current year over that of the preceding year under each of the
categories of goods traffic mentioned above should also be given specifically
in a statement annexed to the Revenue estimates. The annexure to the Revenue
Estimates (item (2) of Annexure II) indicating certain selected commercial and
operating statistical data for the purpose of establishing a better link
between the estimates of revenue and working expenses, should be completed in
all respects and sent with the estimates of revenue. Additionally, the
approximate amount of increase in Revenue due to the opening of new lines, as
well as the consequent increase on existing lines, should be stated, as far as
possible, separately for the information of the Railway Board.
322.
Variations under Passenger, Goods and Other Coaching Revenue on account of the
effect of increase/adjustments, if any, in fares and freights as compared to
the increases provided in the Budget Estimates for the year should be
separately explained. The revised estimates of Revenue should, therefore, have
a proper correlation to the latest traffic anticipations as revealed from the
originating, cross and received traffic figures.
323.
Review of Traffic Outlook -
These explanations are required not only to enable the Railway Board to judge
whether the estimates are reasonable, but also to assist them in explaining
them to the Parliament. What in fact is wanted from the General Manager is a
very brief review of the traffic outlook for the current and ensuing years
which can be used for assessing the total traffic prospects of the Railways.
The actual form in which this brief review should be rendered each year is left
entirely to the discretion of the General Manager; the Railway are particularly
desirous that it should not be stereotyped.
Ordinary
Working Expenses
324.
The estimates of Working expenses required from Railway Administrations are so
arranged that Minor Heads of Sub major Heads 01 to 13 of Major Heads 3002,3003
as detailed in Annexure I, are in alignment with minor heads of Railway
Accounting Code Classification as shown below:-
Note
- After implementation of Budget Module on IPAS or any other accounting
software, only the projections pertaining to RE and BE is being submitted to
Railway Board through IPAS Budget Module or accounting software.
325.
The estimates of expenditure in respect of each Sub Major Head should, be
submitted after compilation in the Budget Module in IPAS, the, figures being
given in thousands of rupees. In preparing their estimates the Railway
Administrations should ensure that the figures of actual expenditure for the
preceding year shown in the estimate agree with those reported to the Railway
Board. The figures of actual expenditure for the current year should represent
the latest data.
326.
Explanation of variations -A
brief narrative explanation should be given of the causes (with amounts
involved in each case) of substantial differences between the figures adopted
for the revised estimate of the current year and(i) the actuals of the previous
year, and(ii) budget allotment for the current year. Similar explanation should
be given for differences between the figures of the budget estimate of the
ensuing year and the revised estimate of the current year. Large variations
which compensate each other should also be indicated.
327.
The revised estimate for the current year and the budget-estimate for the next
year should be fixed after taking into account the expenditure of the previous
year and comparing the expenditure during the first five months of the year
with the corresponding period of the previous year. A full explanation of
special features and any exceptional and abnormal adjustments (with amounts
involved) included in each period of the previous and current year as also in
the next year, should be given in the explanatory note accompanying the
estimates. The financial effect of variations on account of specific reasons
should be clearly brought out under each Sub Major Head as shown in the
statements (Items 58 to 64) of Annexure II.
328.
When the expenditure anticipated in the last seven months of the year is
disproportionate as compared with (i) the first five months of the year or (ii)
the corresponding period of the previous year, reasons for the disproportionate
expenditure should be given in the revised estimate. Special and non-recurring
items of expenditure in a year should show a corresponding saving in the
following year. Likewise, when transfers are made from one Sub Major Head to
another due to changes in classification, the saving shown under one Sub Major
Head should agree with the excess shown under the other Sub Major Head.
329.
Estimate of Cost of Establishments-
In working out the cost of establishments, the Railway Administrations should
not make any meticulous calculations of the emoluments to which individuals
will be entitled if they continue to hold the posts during the year. The
estimates of the cost of establishment should be based on past experience of
their actual cost, with due allowance for any changes either in the number or
rates of pay of each individual establishment in the year in which, or for
which the estimate is being made.
330.
In the explanatory note accompanying the estimate, information should be given
as to what part of the proposed expenditure represents expenditure on the
permanent staff already sanctioned, how much of the proposed increase in the
next year is due to ordinary increments, how much is new expenditure and how
much for temporary establishment. Reasons should be given for additional staff
when provision is made in the estimates for such increase in expenditure. The
estimates of ordinary working expenses should be accompanied by 'Staff
Statements' under each Sub Major Head in the proforma given in items, 14, 16,
18, 21, 23, 25, 27, 29, 41 and 43 of Annexure II. Explanations for substantial
variations in the numbers should be furnished as between current year's budget
and, revised estimates and budget estimates for the following year.
331.
Suspense Heads -The estimates
in respect of revenue suspense heads (viz., Demands Payable and Misc.
Advances-Revenue) should be prepared by the Financial Advisor & Chief Accounts
Officer on the basis of past actuals and current trends. Budget for Demands
payable is for the net increase or decrease in the balance at the end of the
year, while for Misc. Advances the budget requirement would be on a 'gross'
basis.
332.
Repairs and Maintenance Expenditure of
Rolling Stock -The budget and revised estimates of expenditure
on repair and maintenance of Rolling Stock separately by locomotives (steam,
diesel and electric), carriages, wagons and other coaching vehicles included in
Sub Major Head (SMH) 03 and 04 should be supported by separate statements (see
item 19 in Annexure II)showing in detail the estimated number of Rolling Stock
proposed for repairs in the current year's budget and revised estimates and the
budget of the ensuing year with corresponding unit cost.
333.
Cost of Fuel -Two statements,
one showing the quantity and cost of coal, diesel oil and electricity (items 30
to 32 in Annexure II) and another showing the quantity and freight of coal
carried by sea (item 33 in Annexure II) should be submitted along with the
revised and budget estimates for Sub Major Head (SMH) 08- Operating Expenses -
Fuel. Care should be taken to furnish complete information as required in the
'Correlation Statements' (items 34 to 36 in Annexure II) accompanying the
revised and budget estimates for Sub Major Head (SMH) 08.
334.
Miscellaneous Expenditure
-This includes expenditure budgeted under (Major Head 3001, SMH 12 of 3001,
3002 & 3003 and Major Head 3006).
For
transactions with Company Railways under Major Head 3001 separate estimates
should be prepared for payment of subsidy/rebate and /or share of earnings to
worked lines in keeping with the terms of Contract with each Railway.
335.
List of Credits or Recoveries
–
a)
The following items of credits or recoveries shall be excluded from the scope
of the demands presented for vote of Parliament:-
i)
Commission on account of internal check of military warrants and credit notes
in connection with the military traffic.
ii)
Hire and haulage charges of rolling stock from Port Trust Railways or other
non-budget lines.
iii)
Service contributions on account of staff on deputation to organizations whose
expenditure is not met from consolidated fund of India.
iv)
Credits for released material relating to renewal and replacement works and
also those released from repair and maintenance works.
v)
Credits for electrical energy supplied to outsiders, other Railways, Government
Departments and consumed for purposes other than traction.
vi)
Sale proceeds in Canteens, state Government grants to schools, fees from
students, etc.
vii)
Credits under "Suspense" heads.-
a)
Issue from Stores Suspense.
b)
Issue under Manufacture Suspense.
c)
Credits under "Miscellaneous Advances".
viii)
Credits on account of unconnected loco coal wagons;
ix)
Credit for freight charges on railway materials including fuel;
x)
Deficit in the net earnings pertaining to worked lines recoverable from State
Governments etc;
xi)
Write back of cost of military sidings initially charged to capital;
xii)
Cost of cinders and coal ashes sold and utilised for departmental purposes;
xiii)
Credits on account of Inspection charges on coal;
xiv)
Share of cost of works chargeable partly to Railway Estimate recoverable from
other departments of Central Government or a State Government if the portion of
expenditure on such works debitable to Departments concerned cannot be
segregated and booked as such, and
xv)
―Miscellaneous receipt‖ under classification of works Expenditure;
The
Railway Board should be furnished with a list of such credit or recoveries
accompanying the revised and budget estimates under each Sub major Head in the
following form:-
b)
The following items of credits or recoveries shall be taken in reduction of
Budget Estimates and only net figures (minus or plus) shall be shown under the
respective Sub heads of the Sub Major heads:-
i)
Credits on account of accounting adjustments such as
a)
Credits realized from surplus stock, found in stock verification, etc.
b)
Credits on account of surplus stock transferred from one work to another
Chargeable to same or another grant or to stock.
c)
Credits to Capital or Depreciation Reserve Fund or other heads on account of
Write-back adjustments, etc.
d)
Credits for overcharges and undercharges under repairs.
ii)
Credits on account of the rebate for purchases made through Supply and
Disposals Department.
iii)
Credits under "Demands Payable" and "Unpaid Wages".
336.
Summary of Ordinary Working Expenses
-The Railway Board should be furnished with a summary of the ordinary working
expenses (in the form at item 46 of Annexure II) comparing, under each Sub
Major Head the actuals during each of the preceding three years, with the
budget estimates and revised estimates for the current year and budget
estimates for the following year. The figures of actuals should agree with
those appearing in the final accounts intimated to the Railway Board and the
differences, if any, should be suitably explained in the remarks column.
337.
Summary of Revenue Receipts and Expenditure- In order to represent the
financial position of a railway correctly, the estimates of its receipts should
be correlated with the estimates of its expenditure. For this purpose the
Railway Board should be furnished, along with the estimates for gross receipts,
with a statement summarising the estimates for gross receipts and expenditure
chargeable to revenue. These should contain the figures for the previous year,
the budget and revised estimates of the current year and the budget estimates
for the following year.
Appropriations To and
Expenditure To Be Met Out Of Railway Funds
338.
The Major Heads under which transactions of Railways pertaining to various
Funds is budgeted, whether for appropriations to or expenditure from the Funds,
and the source of finance for each, are given in the table below :-
As
may be seen from, column 3 of the foregoing Table, the Funds are financed from
internal resources of the Railways.
339.
Except in the case of Pension Fund for which the Revised and Budget Estimates
are prepared by, and appear in the Budget Statements of the individual Railway
Administrations, the responsibility for framing the revised and budget
estimates for the other railway funds with the Ministry of Railways (Railway
Board) (see para 305). The estimate amount of appropriation to the Pension Fund
is based on actuarial calculations to provide for the liability arising from
pensionable service rendered by Railway employees for varying periods. Where
such actuarial calculations are not completed, the appropriation is made on an
adhoc basis to be suitably re- assessed in due course.
340.
The Budget estimate for appropriation to the Depreciation Reserve Fund (DRF) is
based on the replacement programme including arrears of depreciation, if any,
to be made good during the following year. Such an estimate is really not an
isolated exercise only for the purpose of the annual budget but is a part of
the overall resources planning of the Railways.
341.
Similar position obtains, by and large, in respect of the Development Fund.
However, the Railway's Revenue surplus envisage in the Plan, out of which these
funds are financed, may undergo
considerable change due to various factors affecting Railway operations. A
fresh assessment of the surplus if any, to be appropriated to this fund has,
therefore, to be made in the Revised and Budget Estimates.
342.
Even though the estimate of appropriation to the Depreciation Reserve Fund is
prepared by the Railway Board, the amount finally fixed is distributed over the
Railways on the basis of the Capital Outlay of each railway at the end of the
previous year as shown in the Finance and Revenue Accounts of the Government of
India. The estimate shows separately the amount actually contributed to the
Depreciation Reserve Fund in the accounts of the previous year, the figures of
budget and revised estimates for the current year, and the budget estimates for
the following year.
343.
As regards the estimate of expenditure to be met out of the Railway Funds, the
table in para 338 shows that so far as DRF and DF are concerned, the
expenditure under Capital Segment is budgeted as part of the Railway‘s Works
Machinery and Rolling Stock Programme (see paras 346 et seq.). The
budget/revised estimates for Sub Major Head 11-Pensionary charges- Pension Fund
are prepared by the individual Railway Administrations taking into account the
pensionary charges payable during the year to pensionable Railway Employees.
The estimates relating to safety and Customer Amenities Works are prepared by
the individual Railway Administrations on the basis of the funds requirement of
Safety and Customer Amenities Works specified in this behalf.
344.
Deleted
345.
After merger of Railway Budget with Union Budget, no payment is to be made to
General Revenues from 2017-18 onwards. Transfers to Funds, such as National
Investment Fund, Central Road and Infrastructure Fund and Rashtriya Rail
Sanraksha Kosh are controlled by Ministry of Finance. 3
46.
Works, Machinery and Rolling Stock Budget
-The revised and budget estimates for expenditure on construction, acquisition,
and replacement of assets (briefly known as the Works Budget), are prepared in
the form of the Works, Machinery and Rolling Stock Programmes. Detailed
instructions for the preparation and submission of the Rolling Stock Programmes
and the Machinery and Plant Programme are contained in Chapter X of Indian
Railway Rolling Stock Code. The Works Programme is required to be prepared in
accordance with the instructions embodied in Chapter VI of the Indian Railway
Code for the Engineering Department.
347.
Capital Expenditure for Works is classified
under Major Head 5002 - Capital Outlay on Indian
Railways-Commercial Lines ,5003- Capital Outlay on Indian Railways- 23
Strategic Lines (erstwhile Demand no. 16), irrespective of whether expenditure
is charged to the Capital , the ‗Depreciation Reserve Fund', the 'Development
Fund', the ‗Railway Safety Fund‘, the ‗Rashtriya Rail Sanraksha Kosh‘ or ‗Extra
Budgetary Resources‘. Works Demand provides for booking of expenditure by
various Plan heads and for the purpose of link with the accounts of Central
Government, the Plan heads form the Minor Heads of Railway Works/Capital
Expenditure, under the Major Heads 5002 & 5003. Minor heads of classification
also refer to Plan head code. The list of Plan Heads is as follows :-
The
source of financing is indicated by the following numeric codes while booking
of works expenditure under the Revised Classification:-
20-Capital
21- DRF
23-
DF I,
33-DF
II,
43–DF
III,
53-DF
IV
26
– Railway Safety Fund
29-
Rashtriya Rail Sanraksha Kosh
83-
EBR(IF)
'Works
Expenditure' of the Railways is thus financed from, Railway Funds (DRF, DF),
Railway Safety Fund, Rashtriya Rail Sanraksha Kosh and Capital provided by the
General Revenues. The upper limit on the ‗Works Budget‘ of the Railways is,
therefore, determined by the resources allocation under various well-defined
Plan heads, such as New lines construction, Rolling stock, Electrification
Projects, Traffic Facilities, Investment in Road Service and Commercial
Undertakings, Metropolitan Transport Projects and Inventories, etc Within this
allocation of resources, the Railway Administrations are required to make out
their programmes, duly vetted by the Financial Adviser and Chief Accounts
officer for submission to the Railway Board by a specified date. The programmes
are examined by the Railway Board and discussed, where necessary, with the
General Managers before finalising the revised and budget estimates in respect
of the Works, Machinery and Rolling Stock programmes.
348.
Inventories -The revised and
budget estimates for inventories viz. store in stock, works-in-process in
workshops and production units, other stores transaction such as purchase,
sales and Miscellaneous Advances (Capital) are all part of Capital Outlay on
Indian Railways-Commercial Lines/Strategic Lines
(Major
Head 5002&5003. -Assets Acquisition, Construction and Replacement) The
value of the inventory under these heads is held as part of the Railways'
Capital Investment. The revised and Budget Estimates for the inventories depend
on various factors. Even though budgeted under Capital Segment, the operation
of the inventories in Zonal Railways depends almost entirely on the revenue
operations as budgeted under the various Sub Major Heads for Ordinary Working
Expenses. In Production Units, however, the inventory budget has to be closely
linked with the manufacturing operations budget which, in turn, will be
dove-tailed with the Rolling Stock Programme. Detailed instructions for the
Preparation of the budgets for stores transactions and manufacture operations
are contained in Chapter XXXI of the Indian Railway Code for the Stores
Department and Chapter X of Indian Railway Rolling Stock Code respective.
349.
Civil Demands-To enable the
Ministry of Finance to incorporate the requirement of and /or information
relating to the Ministry of Railways regarding staff advances and other transactions which form
part of the General Budget, the Railway Board has to obtain from- the Railway
Administrations for transmission to the Ministry of Finance a number of
statements. These are dealt with below.
350.
Income tax, Interest on Advances by Central Government and Interest on Debt and
other Obligations -The estimates of income-tax and interest should be submitted
in the form at Annexure III.
351.
Debt Heads and K-Deposits and Advances
-These estimates are required by the Railway Board in the form at Annexure IV.
352.
K-Deposits and Advances and F-Loans and Advances, by the Central Government-The
revised and budget estimates of advances should he submitted to the Railway
Board in the form at Annexure V.
353.
Remittance Transactions -The estimates of remittance transactions should be
submitted to the Railway Board in the detail shown in form at Annexure VI .The
estimates should be framed, as far as possible, in conformity with those of the
other party to the transaction, and wherever there are any important
differences which it is not possible to reconcile the differences should be
specifically mentioned in the explanatory notes to the estimates.
Section III-Compilation
And Scrutiny Of Budget In The Railway Board
354.
The estimates of working expenses submitted by individual railways are subjected
to a critical examination by the Railway Board and, after taking all the
relevant factors into consideration, the Railway Board frame their own estimate
of the expenditure likely to be incurred during the year.
355.
The procedure adopted by the Railway Board in fixing the allotment for each
railway is as follows: The Revised Estimate for the current year is first fixed
under each Major Head for each railway, after taking into account the
expenditure for the preceding year and comparing the expenditure during the
first seven months of the current year with the corresponding period of the
previous year, full consideration being paid to the special feature of both
years. Having thus fixed the revised estimate for the current year, the budget
estimate for the next year is prepared on a consideration of the special
circumstances so far as known, of both years. The amounts provided for
individual railway administration are restricted as nearly as the Railway Board can assess to their actual need,
consistent with the exercise of the most rigid economy.
356.
The estimates of expenditure on rolling stock, plant and machinery, structural
and other engineering works (i.e., programmes of rolling stock plant and
machinery and works) submitted by the railways, after having been carefully
examined by the Railway Board as to the necessity and justification of the
works included therein, are discussed with the railway administration and the
work to be undertaken during the Budget year decided upon. The programmes as
finally settled after discussion form the budget estimates of railways for
expenditure to be incurred during the following year on new constructions and
open line works chargeable to Capital, Capital Fund, Depreciation Reserve Fund,
Development Fund., Rashtriya Rail Sanraksha Kosh, Railway Safety Fund and Extra
Budgetary Resources.
357.
Submission to the Minister -The estimated amount required for Capital
expenditure during the next year is intimated to Ministry of Finance for
necessary provision being made in the ―Way and Means‘‘ budget of the Government
of India and after it has been ascertained from Finance Ministry that funds
will be available to meet the estimated expenditure, the programmes are
submitted to the Minister for approval.
358.
The rolling stock and plant and machinery programmes, as approved by the
Minister, are subject to further modifications which may subsequently necessary
due to one or other of the following causes: -
i)
If any item of rolling stock and plant and machinery ordered for delivery in
the current year is not delivered before the end of the year and remains
unpaid, it becomes necessary to provide money in the programme for the next
year for such items as will be delivered in that year.
ii)
Later information may suggest alterations in the estimated prices at which the
stock can be purchased.
iii)
When, owing to the early date on which the programmes are prepared, other
modifications may be found necessary during the course of the year.
Of
the proposed modifications, the important ones, if any, are, however,
specifically brought to the notice of the Minister before the presentation of
the Budget to the Parliament. The estimates of working expenses as fixed by the
Railway Board each railway and those of expenditure on works, plant and
machinery and rolling Stock as finally settled, are consolidated under the
respective Major Heads/Sub Major Heads detailed in paragraph 306 and submitted
to the Minister before submission to the Ministry of Finance.
359.
Deleted.
360.
Appropriation Bill - Pursuant
to Article 114 (1) of the Constitution, after the Demands for Grants have been
voted by the Lok Sabha, there shall be introduced a Bill to provide for the
Appropriation out of the Consolidated Fund of India of all moneys required to
meet the grants so made by the Lok Sabha and the expenditure, If any, charged
on the Consolidated Fund of India, but not exceeding in any case the amount
shown in the Statement previously laid before the Parliament. The Appropriation
Bill as passed by the Parliament and assented to by the President forms the
basis for budgetary allocation to the different Ministries including Railways.
Section IV -
Administering The Budget
361.
Distribution of Funds by the Railway Board-The Grants as voted by the
Parliament and the appropriation for the charged expenditure as sanctioned by
the President are distributed by the Railway Board among the railway
administrations and other authorities subordinate to them, as soon as possible,
after the Budget is sanctioned. The sums so distributed are called
"Allotments" and the orders by means of which the allotments are made
are called "Budget Orders". The allotments made out of funds voted by
the Parliament are shown as "Voted" and those fixed by President are
shown as "Charged".
362.
Along with the Budget Orders
―Detailed Demand for Grants, Major Head wise details of Zonal Railways/Spending
Units and Works, Machinery and Rolling Stock Programmes (Pink Book) is made
available" to the railway administrations for working expenses and Capital
expenditure. The Budget allotment made to a railway administration is intended
to cover all charges, including the liabilities for past years, to be paid
during the year or to be adjusted in the accounts for it. It shall be operative
until the close of the financial year. Under the 'doctrine of lapse', any
unspent balance shall lapse and shall not be available for utilization in the
following year.
363.
In the event of the Budget Orders from the Railway Board not being received
before the commencement of the financial year, the railway administrations are
empowered to incur expenditure, pending the receipt of the Budget Order, on
works which were in progress at the end of the previous financial year. All
expenditure incurred under this rule must be treated as a charge against the
allotments eventually made for such works.
364.
When the Budget Orders issued by the Railway Board show any reduction in the
estimates originally submitted to them, prompt measures should be taken by the
railway administrations to limit the expenditure to the amounts allotted and
distributed by the Railway Board.
365.
Distribution of Funds by General Managers to Lower-Authorities - Subject to the
other provisions of this chapter, or of any general or specific orders issued
by the Railway Board, a General Manager is expected to take steps immediately
to distribute the funds, placed at his disposal, to authorities subordinate to
him in such manner as he may consider most suitable, provided that the total of
the sums so allocated does not exceed the total of the grant placed at his
disposal. In making this initial distribution, he may, at his discretion keep a
sum un allotted as a reserve for emergencies that may arise in future. He may
also vary the initial distribution as necessity arises during the course of the
year. In regard to "Carry Over" works, the latest information as to
the necessity and extent of funds required for such works should be obtained
from the authorities concerned and taken into consideration in making the
initial distribution.
366.
With respect to expenditure on works, the allotment made by the General Manager
to lower authorities shall, as for as possible, follow the lines of the Works,
Machinery and Rolling Stock Programmes issued by the Railway Board that is
i)
a specific sum shall be allotted by him for each item of rolling stock and for
each individual work estimated to cost over one lakh of' rupees. The General
Manager may also allot specific sums for other works for which he considers
desirable to keep separate accounts, i.e., above a certain minimum to be
prescribed by him,
ii)
a lump sum shall be allotted by him for all work which are individually
estimated to cost less than the minimum limit prescribed by him.
iii)
the conditions under which and the extent up to which authorities under him may
sanction re-appropriations between the sums allotted for individual works shall
be specified by him in making the allotment, and
iv)
any reappropriation in excess of that admissible under clause (iii)from the sum
allotted for an individual work or any reappropriation from and to the lump sum
allotted under clause (ii) above shall require the prior sanction of the
General Manager.
The
authorities to whom funds are distributed by the General Manager may, subject
to any general or special instructions issued by him, redistribute the fund
placed at their disposal to the authorities under them.
367.
No expenditure shall be incurred by an authority without the allotment of
necessary funds. The authority to whom the funds are allotted, shall be
responsible to report at once to the next higher authorities the probability of
any lapses or excesses over the sums placed at their disposal. In exceptional
cases where expenditure is authorized in anticipation of the allotment of
funds, or in excess of the existing provision, the authorization should be
followed, as soon as possible, by a formal allotment of funds to the extent
required.
368.
The expenditure on each work shall be limited to the sum allotted for it. If
for exceptional reasons, expenditure in excess of Budget allotment has to be incurred
and if the authority incurring the expenditure is either not in a position to
find funds by reappropriation or is not empowered to sanction a reappropriation
therefore, application for additional funds shall be made to the next higher
authority stating how the expenditure is proposed to be met. In doing so it
should invariably be explained why the need for the expenditure was not
foreseen in time for inclusion in the budget and why the outlay cannot be
postponed to the next financial year. In each case a copy of the order making
the allotment or sanctioning a reappropriation shall be sent to the Accounts
Officer concerned by the authority issuing the order or sanctioning the
reappropriation.
369.
Responsibility of the Railway Board to avoid Excess over Grants or Expenditure
on a New Service/New Instrument of Service- It is the responsibility of the
Railway Board to ensure that the total expenditure against a grant voted by the
Parliament or appropriation sanctioned by the President does not exceed the
amount of the grant (including supplementary grants) or of the appropriations
(Including supplementary appropriations). They are also required to watch that
the money voted by the Parliament is spent on the purposes set out in the
detailed Demand for Grants presented to the Parliament and is not utilized for
expenditure on New Service/New Instrument of Service not voted by Parliament
(see paragraph 382).
370.
In pursuance of the recommendations of the Public Accounts Committee, presently
New Works estimated to cost Rs. 250 lakhs or more each are treated as ―New
Service/New instrument of Service‘. The term ‗New Service‘ has been held as
referring to expenditure arising out of a new policy decision, not brought to
the notice of Parliament earlier, including a new activity or a new form of
investment. Likewise, relatively large expenditure arising out of important
expansion of an existing activity is treated as ‗New Instrument of Service‘,
which is a slight variant of the term ‗New Service‘.
371.
Responsibility of Railway Administrations in
case of Excesses or Lapses -The railway administrations shall be
responsible to ensure that no expenditure is incurred in excess of the Budget
allotments made to them. Should it become apparent at any time that the grant
for the year is likely to be exceeded from any cause whatsoever, the General
Manager should report the position to the Railway Board and apply for
additional funds. No liability may be incurred in one year against anticipated
grants of a succeeding year except that advance commitments for procurement of
stores for works may be made as provided in para 812-S to the extent authorised
by the Railway Board from time to time.
372.
It shall also be the duty of the administrations to see that the allotments
made to them are fully expended, in so far as is consistent with economy and
the prevention of large expenditure in the last months of the year for the sole
purpose of avoiding lapses. They shall be responsible for ensuring that money
which is not likely to be needed during the year is promptly surrendered so as
to allow of its appropriation for other purposes.
373.
Powers of Railway Administrations in regard to emergent and inevitable
expenditure -Notwithstanding the provisions of paragraph 371 above, the commencement
of works urgently necessary to safeguard life or property or to repair damage
to the line caused by flood, accident, earthquake or other unforeseen
contingency, so as to restore or maintain through communication may be
authorized by the Executive Engineer; but he should at once submit a report
through the usual channel to the authority competent to give administrative
approval to the work and to allot the required funds.
374.
Expenditure to meet a sudden increase in traffic or for ensuring the safe operation
of traffic may be incurred with the personal sanction of the General Manager in
anticipation of the allotment of necessary funds by the Railway Board provided
that the Financial Advisor & Chief Accounts Officer concurs. This power
cannot be delegated and can be exercised by the General Manager only where the
expenditure is within his powers of sanction. In all cases where this requires
an allotment of additional funds, a report showing the expenditure involved and
the additional funds required should be submitted to the Railway Board, as soon
as possible.
375.
Re-appropriations/Redistributions
-The transfer of funds, originally assigned for expenditure on a specific
object to supplement the funds sanctioned for another object is called
"Reappropriation" or ―Redistribution‖
376.
Restrictions on Re-appropriations
-Within the amount of a grant as voted by the Parliament, the Railway Board
have full power of transferring the provision from one Sub Major Head/Sub-Head
to another by a formal order of reappropriation. However, Redistributions are
not permissible between:
a)
One Segment of the Grant ( viz. Revenue and Capital) and another
b)
Voted and Charged allotment
c)
One Major Head to another
d)
One Source of Fund to another (i.e. between Capital, Railway funds, Railway
Safety Funds, Rashtriya Rail Sanraksha Kosh, EBR(IF) , EBR(IRFCBonds) etc.)
e)
One Railway Fund and another
377.
Powers of Railway Administrations (i.e., Zonal Railways/PUs )-
i)
Capital Segment
a)
Full powers to redistribute among itemized Pink book works within same
plan-head and same source of fund, subject to original outlay (BE) not getting
reduced to less than Rs. 1 thousand.
b)
Full powers to redistribute within ―LAW Book items‖ sanctioned under Pink Book
item of ―works costing below Rs. 2.5 crores each‖ (Lumpsum works)
c)
Prior Approval of Railway Board is required in following cases:
1)
Inter Plan head Redistribution
2)
Redistributions from/to and among plan head 21 Rolling Stock(Bulk Order) items
3)
To/from and among works being executed by Rail Vikas Nigam Limited (RVNL)
4)
On portion of work constituting ‗Material Modification‘ which are above Rs. 2.5
crores, if material modification pertains to current year
5)
For any redistribution under allocation Extra Budgetary Resources (EBR), except
EBR(IF)
6)
To/from and among items declared as ‗National Projects‘ or ‗Projects of
National Importance‘
ii)
Revenue Segment
a)
Full powers to redistribute within same Primary Unit under same Sub Major Head
b)
All other proposals of reappropriation to be sent to Railway Board for
consideration.
Above
mentioned Delegated Powers of Railway Administration for redistribution may be
modified by Railway Board through the guidelines issued from time to time.
378.
The amount allotted to the railway administrations under the Civil Grant for
"Interest on debt and other obligations and reduction or avoidance of
debt" is distributed under the following units of re-appropriations, viz
:-
i)
State Provident Funds,
ii)
Railway Staff Benefit Fund,
iii)
Eastern Group Sleeper Control Provident Fund,
iv)
Depreciation Reserve Fund Railways,
v)
Railway Development Fund,
vi)
Pension Fund.
No
reappropriation is permissible from one unit to another.
379.
Other re-appropriations may be sanctioned by the, railway administrations but
no re-appropriations are permissible after the close of the financial year,
i.e., 31st March. The re-appropriations by railway administrations should not
be, made haphazardly on the basis of individual items of expenditure where the
original provision is exceeded, not should they be postponed to be made only
towards the end of the year. The railway Administrations should review the
position as a whole at intervals and carry out the necessary re-appropriations.
When funds have to be provided for new expenditure under one of the sub-heads
and the administrations are definitely in a position to transfer the grant from
another sub-head for this purpose, the appropriations should be made promptly.
The whole object is to ensure that, as far as possible, funds which are not
required are withdrawn from disbursing officers as soon as it is definitely
known that they are not required, and incidentally to provide that any really
unavoidable expenditure is met from such savings as far as possible.
380.
All proposals for reappropriation of funds which are beyond the General
Manager's powers shall be submitted to the Railway Board sufficiently early for
necessary action to be taken before the close of the financial year.
381.
When orders are issued by the Railway Board authorising the railway
administrations to incur expenditure to a certain extent over and above the
allotment sanctioned for them, they should be taken as "expenditure
orders" as distinct from "Budget orders". No cognizance of these
orders should be taken while sanctioning reappropriations or in distributing
the sanctioned allotment over the various sub-heads.
Unforeseen
Expenditure-Operation Of The Contingency Fund Of India
382.
Unforeseen expenditure which cannot be met by reappropriation from the existing
grant and expenditure on a ―New Service /New Instrument of Service " not
contemplated in the budget, shall be met from out of the balance in the
Contingency Fund of India placed at the disposal of the Ministry of Finance.
383.
Review of Expenditure- Finance
Heads of all Railway Units should review their expenditure booked on monthly
basis. For Revenue Segment comparison may be made Sub Major Head (SMH) wise and
Primary Unit (PU) wise with respect to Budget Grant, Proportionate Budget
Grant, Actual expenditure figures for Corresponding Period for Previous year or
any other metric deemed informative. For Capital Segment, comparison may be
made Plan Head wise, Source of funding wise and individual work wise with
respect to Budget Grant, Actual expenditure figures for previous year or any
other metric deemed informative.
384.
Monthly Expenditure Review as done above should be shared with the heads of all
executive departments of that Railway Unit for their information and necessary
action. The review may also include the measures suggested that might be taken
for effective Budget Management.
385.
Final -Modification Statement-The
Railway Board should be furnished, for each Major Head/Sub Major Head separately,
so as to reach, Railway Board within the prescribed date with statements
showing the additional allotments required (both voted and charged) or
surrenders to be made, during the current financial year under each head, as
prescribed in the budget orders, and requiring the sanction of the President.
The variations between the final modified allotments required and the revised
estimates as fixed by the Board should in all cases be supported by adequate
explanations of the reasons for the demand or surrender.
386.
The railways should, however, continue to review the budgetary position further
on submission of the Final Modification statements and any modification that
may be considered necessary as a result of new factors visualized and the
further review of budgetary position should be advised to the Board at the
earliest.
387.
Deleted
388.
Deleted
389.
The figures of supplementary grants required or surrenders made in respect of
―Interest on other obligations and reduction or avoidance of debt" and
―Loans and Advances bearing interest" should be submitted to the Railway
Board so as to reach them not later than the 15th February each year. These
figures should be final, as no change in the allotment of these grants can be
made later.
390.
Supplementary and Excess Grants-
Notwithstanding the provisions in paragraph 382, when the amount of a
grant/appropriation in the budget is found to be insufficient for the purpose
of the current year, an estimate for supplementary grant /appropriation, is
submitted by the Railway Board to the Ministry of Finance for the vote of the
Parliament/sanction of the President in the same way as the original ―demand
for Grant/Appropriation" except that the recommendation of the President
has to be obtained for supplementary Demand not only under Article 113 (3) but
also under Article 115 (1) (a) and 115(2) of the Constitution.
391.
Unlike Budget Grant and Supplementary Grant which are obtained from Parliament
in respect of expenditure to be incurred during the year, Excess Grant relate
to expenditure already incurred, for reasons to be fully explained, in excess
of the money voted by Parliament to meet the expenditure during a year. The
Demand for an excess grant is based on the recommendations of the Public
Accounts Committee as a result of their scrutiny of the Appropriation Accounts
of the Railways and the Audit Report of the Comptroller and Auditor General
(see, Chapter IV). Consequent upon merger of Railway Budget with Union Budget
in 2017-18 the Demand for Excess Grant in respect to Ministry of Railway is now
presented by the Ministry of Finance.
- According to Article 112(1) of the Constitution of
India, who is responsible for laying the annual financial statement before
both Houses of Parliament?
- A. The Prime Minister
- B. The Finance Minister
- C. The President
- D. The Speaker of the Lok Sabha
Answer:
C. The President
- Which of the following is NOT typically included in the
annual financial statement or Budget?
- A. A review of the preceding year
- B. Proposals for meeting the requirements of the
coming year
- C. An estimate of the receipts and expenditure of the
coming year
- D. An outline of future constitutional amendments
Answer:
D. An outline of future constitutional amendments
- What enabled the separation of the Railway Budget from
the General Budget in India?
- A. Article 112 of the Constitution
- B. The Rules of Procedure of Parliament
- C. A Supreme Court ruling
- D. A presidential decree
Answer:
B. The Rules of Procedure of Parliament
- In which year was the Railway Budget merged with the
General Budget in India?
- A. 2015-16
- B. 2016-17
- C. 2017-18
- D. 2018-19
Answer:
C. 2017-18
- According to Article 112(2) of the Constitution, what
are the two types of expenditures shown separately in the annual financial
statement?
- A. Voted and Allocated
- B. Charged and Allocated
- C. Voted and Charged
- D. Discretionary and Non-discretionary
Answer:
C. Voted and Charged
- Which article of the Constitution states that estimates
of expenditure charged upon the Consolidated Fund of India shall not be
submitted to the vote of Parliament?
- A. Article 110
- B. Article 112
- C. Article 113
- D. Article 114
Answer:
C. Article 113
- Which of the following expenditures is
"charged" on the Consolidated Fund of India in respect of
Railways?
- A. Salary of the Railway Minister
- B. Pension payable to the Comptroller and Auditor
General of India
- C. Cost of new railway projects
- D. Administrative expenses of the Railway Board
Answer:
B. Pension payable to the Comptroller and Auditor General of India
- Which committee made recommendations for the
restructuring of the Formats and Contents of Demands for Grants in 1971?
- A. Finance Committee
- B. Public Accounts Committee
- C. Railway Convention Committee
- D. Estimates Committee
Answer:
C. Railway Convention Committee
- What are the two segments into which the single Demand
for Grant for the Ministry of Railways is classified?
- A. Operational and Non-operational
- B. Revenue and Capital
- C. Fixed and Variable
- D. Direct and Indirect
Answer:
B. Revenue and Capital
- Which of the following provides a built-in mechanism
for isolating fixed costs from variable and semi-variable costs in the
Budget classifications?
- A. The activity classification combined with the
accounting by primary units of expenditure
- B. The alignment with the Plan heads
- C. The functional orientation of the Budgetary Demands
for Grants
- D. The concordance between subheads of the Demand for
Grants and minor heads of accounting classification
Answer:
A. The activity classification combined with the accounting by primary units of
expenditure
11. Who is primarily responsible
for framing the budget estimates in railway administrations?
- A) The General Manager
- B) The Financial Advisor & Chief Accounts Officer
- C) The spending/earning authorities
- D) The Railway Board
Answer: C) The spending/earning
authorities
12. What should be ensured to
achieve accurate budget estimates?
- A) Rely on past experience only
- B) Use a standardized method of estimating
- C) Ensure data is adequate and reliable
- D) Follow instructions from the Railway Board
Answer: C) Ensure data is adequate
and reliable
13. Which categories of estimates
need to be prepared separately?
- A) Gross Receipts and Payments to Worked Lines
- B) Gross Receipts, Ordinary Working Expenses, and Civil
Estimates
- C) Gross Receipts, Ordinary Working Expenses, and Works
Expenditure
- D) All of the above
Answer: D) All of the above
14.How should revenue from each class
of passenger traffic be estimated?
- A) Based on total ticket sales
- B) Based on passenger kilometers and average fare per
kilometer
- C) Based on previous year's total revenue
- D) Based on total number of passengers
Answer: B) Based on passenger
kilometers and average fare per kilometer
15. What is the basis for
estimating goods revenue for major commodities?
- A) Past year's total revenue from goods
- B) Lump sum estimates based on past trends
- C) Anticipated net tonne kilometers and average yield
per kilometer
- D) Random selection of data points
Answer: C) Anticipated net tonne
kilometers and average yield per kilometer
16. Which sources are considered
for estimating Sundry Revenue?
- A) Operating loss reimbursements
- B) Commercial publicity
- C) Rent and tolls
- D) All of the above
Answer: D) All of the above
17. What should be included in
the explanation of variations in receipts?
- A) Narrative explanation of current year's revenue
- B) Comparative analysis with previous years
- C) Reasons for any significant changes in revenue
- D) All of the above
Answer: D) All of the above
18. What kind of traffic data
should be included in the revenue estimates for goods?
- A) Export ore and fertilizers
- B) General goods and cement
- C) Coal for steel plants
- D) All of the above
Answer: D) All of the above
19. What should be shown
separately in the estimates of Revenue?
- A) Local traffic revenue
- B) Interchanged traffic revenue
- C) Both local and interchanged traffic revenue
- D) Neither, only total revenue
Answer: C) Both local and
interchanged traffic revenue
20. What is necessary for the
explanation of the traffic outlook provided by the General Manager?
- A) Detailed statistical analysis
- B) A brief review of traffic prospects
- C) Only a forecast of next year’s revenue
- D) None of the above
Answer: B) A brief review of traffic
prospects
21. What should be done if the
expenditure anticipated in the last seven months of the year is
disproportionate?
- A) Adjust the first five months' expenditure
- B) Provide reasons for the disproportionate expenditure
- C) Ignore the discrepancy
- D) Report only the total expenditure
Answer: B) Provide reasons for the
disproportionate expenditure
22.How should the cost of
establishments be estimated?
- A) Based on meticulous calculations of individual emoluments
- B) Based on past experience with adjustments for
changes
- C) Based on a fixed percentage increase each year
- D) Using a standard template provided by the Railway
Board
Answer: B) Based on past experience
with adjustments for changes
23.How should estimates of
expenditure for Rolling Stock maintenance be supported?
- A) By statements showing estimated number of rolling
stock repairs and unit cost
- B) By a lump sum estimate
- C) By previous year's expenditure only
- D) By a general maintenance budget
Answer: A) By statements showing
estimated number of rolling stock repairs and unit cost
24.. What items are excluded from
the demands presented for vote of Parliament?
- A) Credits for released materials
- B) Service contributions for staff on deputation
- C) Sale proceeds in canteens
- D) All of the above
Answer: D) All of the above
25. What should be included in
the summary of ordinary working expenses?
- A) Comparison with preceding three years' actuals
- B) Budget estimates and revised estimates for current
and next year
- C) Explanations for any differences
- D) All of the above
Answer: D) All of the above
26. The source of finance for the
Funds mentioned in the table is from:
- A) External borrowings
- B) Government grants
- C) Internal resources of the Railways
- D) International aid
Answer: C) Internal resources of the
Railways
27. The responsibility for
framing the revised and budget estimates for the majority of railway funds lies
with:
- A) Individual Railway Administrations
- B) Ministry of Finance
- C) Ministry of Railways (Railway Board)
- D) National Investment Fund
Answer: C) Ministry of Railways
(Railway Board)
28. The estimate amount of
appropriation to the Pension Fund is based on:
- A) Projected future profits
- B) Actuarial calculations
- C) Previous year's surplus
- D) Adhoc basis always
Answer: B) Actuarial calculations
29. The Budget estimate for
appropriation to the Depreciation Reserve Fund (DRF) is based on:
- A) Current year’s revenue
- B) Replacement programme including arrears of
depreciation
- C) Last year’s savings
- D) Government grants
Answer: B) Replacement programme
including arrears of depreciation
30. The Railway’s Revenue surplus
envisaged in the Plan is mainly appropriated to:
- A) Depreciation Reserve Fund
- B) Development Fund
- C) Pension Fund
- D) Railway Safety Fund
Answer: B) Development Fund
31. The amount appropriated to
the Depreciation Reserve Fund is distributed over the Railways based on:
- A) Number of employees
- B) Passenger volume
- C) Capital Outlay of each railway at the end of the
previous year
- D) Freight traffic
Answer: C) Capital Outlay of each
railway at the end of the previous year
32.Expenditure under the
Depreciation Reserve Fund (DRF) and Development Fund (DF) is budgeted as part
of:
- A) General Revenue
- B) Railway’s Works Machinery and Rolling Stock Programme
- C) Staff salaries
- D) Operational costs
Answer: B) Railway’s Works Machinery
and Rolling Stock Programme
33. After the merger of the
Railway Budget with the Union Budget, transfers to Funds such as the National
Investment Fund are controlled by:
- A) Ministry of Railways
- B) Individual Railway Administrations
- C) Ministry of Finance
- D) Reserve Bank of India
Answer: C) Ministry of Finance
34. The source of financing for
'Works Expenditure' of the Railways includes:
- A) International loans
- B) Donations
- C) Railway Funds (DRF, DF), Railway Safety Fund,
Rashtriya Rail Sanraksha Kosh, and Capital provided by the General
Revenues
- D) Private investments
Answer: C) Railway Funds (DRF, DF),
Railway Safety Fund, Rashtriya Rail Sanraksha Kosh, and Capital provided by the
General Revenues
35.Detailed instructions for the
preparation and submission of the Rolling Stock Programmes and the Machinery
and Plant Programme are contained in:
- A) Indian Railway Code for the Engineering Department
- B) Indian Railway Rolling Stock Code
- C) Railway Safety Manual
- D) Railway Financial Handbook
Answer: B) Indian Railway Rolling
Stock Code
36.Inventories in Zonal Railways
are budgeted under which segment?
- A) Operational costs
- B) Revenue Segment
- C) Capital Segment
- D) Staff welfare
Answer: C) Capital Segment
37.For submission to the Ministry
of Finance, the Railway Board obtains estimates of income tax, interest on
advances, and interest on debt from:
- A) International financial institutions
- B) Individual Railway Administrations
- C) Private sector firms
- D) Nationalized banks
Answer: B) Individual Railway
Administrations
38. The Railway Board frames
their own estimate of expenditure likely to be incurred during the year after:
- A) Reviewing the previous ten years' data
- B) Examining the estimates submitted by individual
railways
- C) Consulting external financial advisors
- D) Receiving approval from the Ministry of Finance
Answer: B) Examining the estimates
submitted by individual railways
39. The Revised Estimate for the
current year is fixed under each Major Head for each railway by:
- A) Comparing the first seven months' expenditure of the
current year with the previous year
- B) Assuming a standard 10% increase from the previous
year
- C) Using predictions from economic models
- D) Allocating the same amount as the previous year
Answer: A) Comparing the first seven
months' expenditure of the current year with the previous year
40. The budget estimate for the
next year is prepared by considering:
- A) Historical data only
- B) Special circumstances known for both years
- C) A fixed percentage of increase
- D) Arbitrary figures
Answer: B) Special circumstances
known for both years
41. The necessity and
justification of works included in the programmes of rolling stock, plant, and
machinery are:
- A) Automatically approved
- B) Discussed with the railway administration
- C) Decided by an independent committee
- D) Based on public opinion
Answer: B) Discussed with the
railway administration
42. Capital expenditure
programmes are submitted to the Minister for approval after confirming fund
availability from:
- A) The Prime Minister's Office
- B) The Ministry of Railways
- C) The Ministry of Finance
- D) The Planning Commission
Answer: C) The Ministry of Finance
43.Modifications to the approved
programmes for rolling stock and plant and machinery may be required due to:
- A) Delivery delays of items ordered for the current
year
- B) Changes in estimated prices
- C) New information received after the programmes are
prepared
- D) All of the above
Answer: D) All of the above
44. The important proposed
modifications to the programmes are specifically brought to the notice of the
Minister:
- A) Only after the Budget is presented to the Parliament
- B) Before the presentation of the Budget to the
Parliament
- C) At the end of the financial year
- D) When the Lok Sabha demands it
Answer: B) Before the presentation
of the Budget to the Parliament
45. The estimates of working
expenses and expenditure on works, plant, and machinery, and rolling stock are
consolidated under:
- A) A single Major Head for all railways
- B) The respective Major Heads/Sub Major Heads
- C) A special contingency fund
- D) General revenue accounts
Answer: B) The respective Major
Heads/Sub Major Heads
46. After the Demands for Grants
have been voted by the Lok Sabha, a Bill is introduced to provide for:
- A) Reducing railway fares
- B) Increasing railway budgets
- C) Appropriation out of the Consolidated Fund of India
- D) Revising previous year's expenditures
Answer: C) Appropriation out of the
Consolidated Fund of India
47. The Appropriation Bill forms
the basis for budgetary allocation after being:
- A) Reviewed by the Railway Board
- B) Passed by Parliament and assented to by the
President
- C) Proposed by the Ministry of Railways
- D) Suggested by financial experts
Answer: B) Passed by Parliament and
assented to by the President
48. The sums distributed by the
Railway Board among railway administrations and other authorities after the
Budget is sanctioned are called:
- A) Budget Grants
- B) Allocations
- C) Allotments
- D) Disbursements
Answer: C) Allotments
49. The allotments made out of
funds voted by the Parliament are shown as:
- A) Approved
- B) Voted
- C) Charged
- D) Allocated
Answer: B) Voted
50. The document that provides
detailed demand for grants, major head wise details of zonal railways/spending
units and works, machinery, and rolling stock programmes is known as:
- A) Budget Orders
- B) Appropriation Bill
- C) Pink Book
- D) Allotment Schedule
Answer: C) Pink Book
51. According to the 'doctrine of
lapse', any unspent balance shall:
- A) Be carried forward to the next year
- B) Be distributed among other projects
- C) Lapse and not be available for the following year
- D) Be returned to the Ministry of Finance
Answer: C) Lapse and not be
available for the following year
52.If Budget Orders from the
Railway Board are not received before the commencement of the financial year,
railway administrations can:
- A) Halt all expenditures until orders are received
- B) Incur expenditure on works in progress from the
previous financial year
- C) Use funds at their discretion without any guidelines
- D) Request emergency funds from the Ministry of Finance
Answer: B) Incur expenditure on
works in progress from the previous financial year
53. When the Railway Board
reduces the estimates originally submitted, railway administrations should:
- A) Continue with the original estimates
- B) Limit the expenditure to the reduced amounts
- C) Seek additional funds immediately
- D) Reallocate funds internally without any restrictions
Answer: B) Limit the expenditure to
the reduced amounts
54. The General Manager is
expected to distribute funds to authorities subordinate to him ensuring that
the total sums allocated do not exceed:
- A) 75% of the grant placed at his disposal
- B) The total of the grant placed at his disposal
- C) The estimated expenditure of the previous year
- D) The emergency reserve amount
Answer: B) The total of the grant
placed at his disposal
55. A lump sum is allotted by the
General Manager for works estimated to cost:
- A) Over one lakh rupees
- B) Less than a prescribed minimum limit
- C) Between one and ten lakh rupees
- D) Exactly one crore rupees
Answer: B) Less than a prescribed
minimum limit
56. Any reappropriation in excess
of admissible limits from the sum allotted for an individual work requires the
prior sanction of:
- A) The Railway Board
- B) The Ministry of Finance
- C) The General Manager
- D) The Financial Advisor
Answer: C) The General Manager
57. Authorities to whom funds are
distributed must report probable lapses or excesses over the sums placed at
their disposal to:
- A) The Ministry of Finance
- B) The Railway Board
- C) The next higher authority
- D) The General Manager
Answer: C) The next higher authority
58.If expenditure in excess of
the Budget allotment has to be incurred, the application for additional funds
must include:
- A) Justification for why the need was not foreseen
earlier
- B) A request for approval from Parliament
- C) An automatic allocation from the contingency fund
- D) A new budget proposal for the next financial year
Answer: A) Justification for why the
need was not foreseen earlier
59. The term 'New Instrument of
Service' refers to:
- A) A slight variant of a new service
- B) Expenditure arising from routine maintenance
- C) Reductions in the budget for existing services
- D) Unplanned expenditure due to emergencies
Answer: A) A slight variant of a new
service
60.Expenditure to meet a sudden
increase in traffic can be incurred with the personal sanction of:
- A) The Railway Board
- B) The Ministry of Finance
- C) The General Manager
- D) The Financial Advisor
Answer: C) The General Manager
61. The transfer of funds
originally assigned for a specific object to supplement funds for another
object is called:
- A) Redistribution
- B) Appropriation
- C) Reappropriation
- D) Budget modification
Answer: C) Reappropriation
62.Redistributions are not
permissible between:
- A) Different Major Heads
- B) Voted and Charged allotments
- C) One Source of Fund to another
- D) All of the above
Answer: D) All of the above
63.Reappropriation of funds after
the close of the financial year is:
- A) Allowed under special circumstances
- B) Not permissible
- C) Permitted with approval from the Ministry of Finance
- D) Common practice for large projects
Answer: B) Not permissible
64.Unforeseen expenditure not met
by reappropriation and expenditure on a New Service not in the budget shall be
met from:
- A) The Railway Development Fund
- B) Emergency reserves
- C) The Contingency Fund of India
- D) Supplementary grants
Answer: C) The Contingency Fund of
India
65.Monthly expenditure reviews
are shared with the heads of all executive departments to:
- A) Inform them of budget shortfalls
- B) Take necessary actions for effective budget
management
- C) Reallocate funds immediately
- D) Ensure compliance with financial regulations
Answer: B) Take necessary actions
for effective budget management
66.Supplementary grants relate
to:
- A) Expenditure anticipated for the next year
- B) Excess expenditure already incurred
- C) Additional funds needed for the current year
- D) Savings from previous years
Answer: C) Additional funds needed
for the current year
67. The demand for excess grants
is based on recommendations from:
- A) The Public Accounts Committee
- B) The Ministry of Railways
- C) The Railway Board
- D) The Ministry of Finance
Answer: A) The Public Accounts
Committee
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