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Preparation
Damodara Prasad K
Sr.AFA (retd.)
09491043283
Budget - Overview
• Constitutional Prescription
• Prescribes Targets
• Helps as Co-ordinating mechanism
• Helps as Management Tool for control
• Helps to evaluate performance
• Helps to identify the areas of concern
• Helps plan for the future
The Railway Budget
• an instrument of Parliamentary Financial
Control
• an important management tool.
• Parliamentary Financial Control is secured
– by obtaining Parliament's prior approval for all
'voted' expenditure
– system of reporting back to it, through the Public
Accounts Committee, the actual expenditure
incurred against the Grants voted by Parliament
and Appropriations sanctioned by the President.
The Accounts Department is mainly responsible for
(Para 101 Accounts Code Vol.I )
• Keeping the accounts of the railway in
accordance with the prescribed rules:
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Parliamentary Financial Control Mechanism
• Budget: Railway Budget is an instrument of Parliamentary Financial Control, which is
secured not only by the fact that all ‘voted’ expenditure must receive Parliament’s
prior approval, but also by the system of reporting back to it, through the Public
Accounts Committee, the actual expenditure incurred against the Grants voted by
Parliament and Appropriations sanctioned by the President.
• Supplementary Budget: Parliament by way of passing Railway Budget fix the financial
limit before the Railway within which Railways are empowered to incur expenditure.
Additional fund, required if any, during a financial year also requires clearance from the
Parliament through passing of the Supplementary Budget.
• Parliamentary Committees: Besides the above, the Parliament also exercises its
control through various Parliamentary Committees like the Railway Convention
Committee ( which suggests the whole working mode and methods of capital
investment, rate of dividend etc.), the Estimates Committee , so on.
Expenditure
Revenue Expenditure
Expenditure the benefit of
which is within the Financial Year
Works Expenditure
Expenditure the benefit of which
lasts for many years and may
result in
increase in earnings and/or
reduce expenditure for many years
STRUCTURE OF RAILWAY BUDGET-1
Actuals of LY
Railway
Budget Revised Estimates of CY
February
Budget Estimates of EY
STRUCTURE OF RAILWAY BUDGET-2
REVENUE BUDGET
EARNINGS/RECEIPTS EXPENDITURE
Abstract X Pass, OC Demand No.1 Railway Board
Abstract Y GOODS Demand No.2 Misc estt under Rly board
Abstract Z SUNDRY Demand No.3 Genl Superintendance and Services
Demand No.4 Repairs and Maint of P. Way and Works
Demand No.5 Repairs and Maint of Motive Power
Demand No.6 Repairs and Maint of Carr and Wagon
Demand No.7 Repairs and maint of Plant and Equipment
Demand No.8 Optg Exp Rolling Stock and Equip
Demand No.9 Operating exp - Traffic
Demand No.10 Operating Expenses - Fuel
Demand No.11 Staff Welfare and amenities
Demand No.12 Misc. Working Expenses
Demand No.13 PF Pension Retirement benefits
Demand No.14 - Appn to RLY FUNDS
Demand No.15 Payments to Genl Revenues
WORKS BUDGET
Demand No.14 (RLY FUNDS) PH 11 NEWLINES PH 32 BRIDGES
LOANS CAPITAL FROM GOI PH 14 GC PH 33 S&T
MARKET BORROWING PH 15 DOUBLING PH 36 O Eele Wks
PPP PH 16 TFC FAC PH 41 M&Plant
MB (IF) PH 17 COMPU PH 42 Workshops
PH 21 Rlg Stk PH 51 Squarters
PH 22 LEASE PH 52 Samenties
PH 29 LC gates PH 53 Pamenties
PH30 ROB RUB PH 64 OtherSpWk
PH31 T Renewals ETC
Spending Units
• Smallest Unit which is a Cost Centre,
accountable for execution of specific activities
prescribed in the Budget.
• Expected to regulate commitments as per
provisions in the Budget to achieve the targets
set in the Budget.
• Required to monitor the actual expenditure as
per Budget Proportions.
Liabilities Register
• Records the liabilities committed Primary Unit
Wise.
• Helps monitor assess the undischarged
liabilities at any point of time.
• Helps early submission of Budgetary Reviews.
• Helps check the correctness of computer
generated FMIS statements received from IT
Centre.
TABLE SHOWING REVENUE EXPENDITURE DEMANDS AND THE SPENDING UNITS/DEPARTMENTS OPERATING THE DEMANDS
SPEN DIN G UN ITS
Demand/Dept Genl Accts Persl Stores Engg Mech Elect S&T Optg Comml Claims Catering Medical Security
3-A
4-B
5-C
6-D
7-E
8-F
9-G
10-H
11-J
12-K
13-L
NODAL OFFICER FOR D#16
S.No. Plan Head PHOD Concerned
5. Computerisation FA&CAO
11 Newlines
14 Gauge Conversion
15 Doubling
16 Traffic facilities
17 Computerization
21 Rolling Stock
22 Lease Assets Cap comp.
29 RSW LC GATES
30 RSW ROB RUB
31 Track Renewals
32 Bridge Works
33 S&T Works
35 Electrification
36 Other Electrical Works
41 M&P
42 Workshops
51 Staff Quarters
52 Amenities for Staff
53 Passenger Amenities
64 Other Specified Works
Cap Susp. PH 71,72 and 73
RE/BE
• Special features and gist of variations between
BG-RE & RE-BE for each demand be given.
• RE should be based on the actuals of 1st 6m
+approx. for 7th m. Savings achieved to end of
Oct. be sustained.
• Post budgetary increases and unforeseen exp.
be met within the BG.
• Credits/Recoveries be estimated with utmost
care.
RE/BE
• Variations under each MH be explained by
taking all PUs together; and by PUs for
demand as a whole.
• Projections be made under new PUs like PU
41; 42,43,44 (dues arising for the current year
should not be treated as arrear);52; 45; 46-48
(37-deleted);
• Reflect PU 25 only in D.11 120; PU 08 only in
D.13 890; PU 20 in D.03-12;
SUMMARY of OWE
• a summary of the ordinary working expenses
comparing, under each demand,
• the actuals during each of the preceding three
years, with the budget grant 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.
RE/BE
• Annexure R-3: Staff statements for all demands
(03-12)under each MH for Act, BG, RE and BE. Act
should tally with 40-I of Annual Staff Stat. BG
should tally with figs. in Demands Book Pt-II.
• Variation in staff strength be explained wrt
creations/surrenders/filling up of vacancies.
• Annexure R-4: Performance Units of Exp in D.04-
12 as in Demands Book Pt-II. Data should be
reconciled with the data of S&AO.
• Annexure R-5 & 6: Traction-wise correlation and
rates of Fuel.
RE D.16
• Credits likely to be generated in RE should be
estimated.
• Due regard be given to the upto-date progress of exp
and commitments likely to materialise.
• Projections shall be given for new PH 3700 Tr.D works
by segregating works between 3600 & 3700.
• PH 13 Restoration of dismantled lines, deleted.
• PU-12 CD deleted, 46-48 introduced.
• Source OLWR deleted.
• RE should also cater for the Zonal Rly. works executed
by RVNL.
• Key questions regarding EBRs to be considered are
1.Financing issues 2. Expenditure decisions 3.
Management issues.
RE D.16
• RE projections under inventories be realistic. Actuals
shall match with the figs. in the schedules sent to Board.
• Internal and mutual co-relation be maintained in case of
Stores Suspense and WMS.
• Annexure W-6: Details of WBA
• Annexure W-7: Details of debits raised/accepted- this
should be reconciled with the concerned railway to avoid
duplication.
• Annexure W-14: Staff strength and exp- should indicate
staff in CN org.
• Reasons for projection, where no original grant exists be
given.
EARNINGS RE/BE
• Trend of traffic performance in 1st 7 months be
considered.
• Adverse impacts of earlier part of the year should
not be projected mechanically for the whole
year. Reasons for variation in projections from
the trend be clearly mentioned.
• Anticipated traffic out-put i.e., originating traffic,
lead, rate be assessed correctly for each
class/commodity-wise data for passenger and
freight traffic.
EARNINGS RE/BE
• Other Coaching : break up of earnings from parcel,
military, postal and other traffic be furnished.
• Anticipated Traffic Plan shall be generated.
• Monthly originating earnings from pass, goods and
other coaching traffic be furnished - Ann E1: Traffic
plan Pass; Ann E2: Traffic plan Goods; Ann E3:
monthly details of originating apportioned earnings;
Ann E4: monthly details of safety surcharge.
• Detailed traffic projection with supporting estimate
of earnings shall be furnished.
CIVIL ESTIMATES
• Requirement of funds for Loans and Advances
• Projection for appropriations under I. Tax;
Interest on Debt and other obligations ; Abstract
F-Loans and Advances, Abstract- I Small savings;
Abstract- J Reserve Funds; Abstract- K Deposits
and Advances; Abstract- L Suspense Misc.; and
Abstract- M Remittances for current fiscal and
next year shall be furnished.
• Interest on PF be assessed realistically
considering OB, Actual/anticipated transactions
during the fiscal.
IMPORTANT DATES RE/BE
Estimate of Earnings - 20th December
Revenue Demands 2 to 15 - 1 st December
Civil Estimates - 15th December
Works Demand 16 - 23rd December
Revenue budget - 2016-2017
Budget estimate- Nov./ Dec. 2015
Budget presentation- Feb.’2016
Budget orders- Apr.’2016
August review- Aug.’2016
RE 15-16/ BE 16-17 Nov./Dec.2016
Revised Grant- Feb.’2017
Final Modification- Mar.’2017
Cash book close- 31.03.2017
Closure of Mar. Accounts- Jun.’2017
Appropriation Accounts- Aug./ Sep.’2017
1 G.Traffic Receipts
2 Misc.Receipts
3 Total Receipts
4 NET OW Expenses
5 APPN PN
6 APPN DRF
Total
7 WE(4+5+6)
8 Misc. Expenditure
9 Total Expenses
Net Revenue (3-
10 9)
11 Dividend
12 Excess/Shortfall
13 APPN DF
14 APPN CF
15 APPN DSF
16 OR(%)
Railway Budget 2016-17 -
Description
Earnings Target SCR
2016-17
Rs. in Cr
Abstract X – Passenger Earnings, 51012 4747
Other Coaching Earnings 6185 576
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Steps to prevent
Defects in Budgeting
• Maintain proper record of liabilities for the
year for each commitment made.
• Project requirement of funds in Budget
Reviews as per liabilities register.
• Surrender funds in Budget Reviews, if the
liabilities are not likely to materialize.
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Steps to prevent
Defects in Budgeting
Railways should ensure that the data
on which forecast is based, is
adequate and reliable and also that
the conclusions arrived at from the
data is sustainable by past experience
and future expectations of likely
events.
Extra money asked for but not utilised
gives rise to Audit to pint out cases
under defects in budgeting.
Budget Proportion
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Rectification of Mistakes
• Review of Actual Expenditure with reference
to Grant allotted to be done every month.
• Audit Objections, if any, on incorrect
allocations are to be rectified at the earliest,
to know the actual expenditure against each
source/plan head for proper projection of
requirement of funds in Budget Reviews.
• Clearance of MAC for Supply of Stores to be
done regularly for proper review of
Expenditure.
• To be done as per Para 922 of Financial Code
Volume I
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