Parliamentary Control over Railway Finances

Parliamentary Control over Railway Finances

Parliament House, New Delhi

·         Source: Click for Chapter 3 of Indian Railway Administration & Finance

 

·         The control of Parliament  over railway finance and policy is exercised as follows :—

RCC - Railway Convention Committee Click		NRUCC - National Railway Users Consultative Council Click		PAC - Public Accounts Committee Click
Committee on Subordinate Legislation		Committee on Government Assurances		References from Members of Parliament
Committee system - Referring a matter (of Railways) to the committee of Parliament Members		Estimates Committee		Submission of Annual Budget for voting of Lok Sabha Click
Cut Motions Click		Questions in the Lok Sabha & the Rajya Sabha A) Starred B) Unstarred C) Short Notice		Discussion on urgent matters through Adjournment Motion or Calling Attention notice

 

Single Tender in Works Contracts

Single Tender in Works Contracts

·         Sources: 1214-A of Engineering Code (Railway Board letter no. 97/CE.I/CT/32 dated 19.01.2000)

 

·         Awarded under the following situations:

 

1.       Accidents, breaches involving dislocation to traffic.

2.       Works of specialized nature (subject to personal approval of GM/CAO(C) with prior concurrence of FA&CAO/PFA(C) . For works of specialized nature pertaining to Open line, personal approval of GM is required with prior concurrence of FA&CAO.

3.       Any other situation, inescapable to call for single Tenders /single quotation subject to GM's Personal Sanction with PFA's concurrence.

4.       AMC - Annual Maintenance Contract for equipment incl: small track machines on OEMs - Original Equipment Manufacturers / Authorised dealers of OEMs with AGM's approval.

5.       Works pertaining to doubling, Traffic facility, New lines, gauge conversion and railway electrification projects, which are targeted for completion in the current financial year subject to:

A.      CAO/C & CAO/RE - Up to Rs. 5 Crores

B.      Personal concurrence of FA&CAO/C

C.      Tender Committee should be at least at SAG Level

D.      As per instructions of Railway Board for specific financial year.

 

Note: These powers may be delegated by GMs in consultation with PFA to PHODs/DRMs up to a maximum of Rs. 5 Lakhs per item per annum.  On re-delegation, these powers would be exercised by PHODs/DRMs in consultation with associate finance.

 

·         The Tender Committee composition and the accepting authority should be at least one step higher than the members nominated in case of Open Tenders/Limited Tenders except where G.M. is the accepting authority.

 

·         The following points are to be bear in mind before resorting the Single Tender:

1.        It is in the public interest.

2.       The Demand is urgent.

3.       No other suitable contractor is available to execute the work.

4.       Reasons should be recorded as to why single Tender is being resorted to in preference to limited Tenders.

5.       To be operated in times of cyclone, floods, accidents, sabotage, enemy action, explosions, cases of extreme urgency such as works or supplies necessary to safeguard life or property or repair damage to track caused by flood breaches, washaways, accidents or other unforeseen contingency so as to maintain through communication.

6.       Lighting, transhipment, hiring of plant, machinery, and equipment (including communication equipment) in cases listed above under item No. 5.

7.       Report to GM is necessary for incorporating it in the annexure to the PCDO

8.       The discretion to classify any item of work as one of extreme urgency for the purpose should be exercised personally by the DRMs.

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Differences between Transfer Transactions and Remittance Transactions

Differences between

Transafer Transactions	Remittance Transactions
1. Refers between different units  in same Railway, different Zonal  Railways in Indian Railways and between Capital and Revenue accounts.	1. Refers between Railways and other Govt Depts (Defence, Postal etc) & State Govts.
2. Heads operated: Transfer Divisional, Transfer Railways, Transfer Railway Revenue & Transfer Railway Capital.	2. Heads operated: PAO Suspense, AG Suspense, M-Remittances, Reserve Bank Suspense.
3.  The adjustments are made through issue and acceptance of Transfer Certificates between Accounting units in same Railway or between two Zonal Railways.  Also operation of contra transactions, for transfers between Capital and Revenue accounts.	3. The adjustments are made through issue of Advice of Clearance by the various Accounts Officers and memo of clearance by RBI.
4. Clearance: Through book adjustments (by preparing Journal entries) within Railways itself.	4. Clearance: Adjustments through Reserve Bank of India by operation of Deposit with RBI Account or Cheque Payments.

Debit and Minus Credit

Debit and Minus Credit

§      Minus Credit or Minus Debit is the Unique feature of Indian Railways Accounting system.

§      Probably, nowhere in the World, the Minus Debit or Minus Credit is operated.

§      Let's go into the necessity/object of operation of the Minus Credit.

Minus Credit:

§       When an employee goes on transfer, one unit transfers the Civil Grant of an employee to another unit.

§       In this case, Minus Credit is operated in the Journal entries instead of Debit.  The object is to avoid budgeting effect.  Let's check the transactions

§      Example: Unit 'A' transfer the HBA Debit balance Rs.1,00,000/- of employee X to Unit 'B' on his transfer.

Journal entry in the books of Outward Unit 'A':

Credit - HBA head - Rs. 1,00,000

Minus Credit - Transfer Divisional Unit 'B' - Rs. 1,00,000

(Transferring employee X's HBA Debit balance Rs. 1,00,000 to unit B)

Journal entry in the books of Inward Unit 'B'

Credit - Transfer Divisional Unit 'A'   - Rs. 1,00,000

Minus Credit  - HBA head - Rs. 1,00,000

(Accepting the Debit balance of HBA of Mr X in his books)  

§      With the above transactions, Debit balance of HBA in the books of Unit 'A' is reduced and to that extent, debit balance of HBA in the books of Unit 'B' is added.

§      Though, it is a Debit balance, the transactions are effected through minus credit to avoid budgeting effect twice (one at Grant of HBA at unit A and another at accepting the Debit at Unit B)

Some More examples of operation of Minus Debit and Minus Credit

1.       Clearance of Cheques & Bills  - Minus Credit

2.       Clearance of Remittance Into Bank - Minus Debit

3.       Intra Railway Transfer Transactions among Divisions in a Zonal Railway - Transfer Divisional head operated  - Minus Debit and Minus Credit

4. Rectification of errors in accountal of transactions before closure of Books. 

5. Write back adjustments

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PAO Suspense / AG Suspense

PAO Suspense / AG Suspense

«  Full form: Pay & Accounts Officer Suspense / Accountant General Suspense

«  Source: Chapter 4 of Accounts Code (Para No. 457 A)

«  It is one of the Suspense Heads operated in Indian Railways in respect of its transactions with other Central Govt Depts/State Govts.

«  For the settlement  of inter departmental  and  inter governmental transactions (other than defense and postal) arising in the  books of  Railway  Accounts Offices, PAO  suspense/AG suspense  head is operated.

«  Pay and Accounts officers / Accountant Generals will not settle transactions with railways through the Reserve Bank and vice-versa. All their dues will be paid/received at weekly intervals on cash basis i. e., by cheques or Government drafts.

«  Journal entries of PAO/AG

1) When a Claim is preferred 

                                PAO/AG Suspense        Dr.               xxxx

                                                To Service Head/Earning Head    Cr              xxxx

( Claim is preferred on Central Govt Dept or State Govt for rendering services to them by Railways)

2) On receipt of Cheque/Demand Draft

                                Remittance Into Bank A/c      Dr                  xxxx

                                                To PAO/AG Suspense          Cr                      xxxx

(On Receipt of Cheque/Demand Draft and cleared the PAO/AG Suspense Head)

«  The balance under this  head is  exhibited on  the Liabilities  Side of the  Balance Sheet of Indian  Railways. 

Remittance Transactions @ Indian Railways

Transactions Between Railways & other Govt Depts	Outward	Inward	Remarks
Cash	PAO Suspense	PAO Suspense	All Depts in Central Govt (except Postal & Defense)
Cash	AG Suspense	AG Suspense	State Governments
Adjustments through RBI	M - Remittance	Reserve Bank Suspense	Postal & Defense

«  For article on Reserve Bank Suspense - Click here

&&&&

Works Programme

Works Programme

      Source: Clickfor 6th chapter of Engineering Code

 

       Investment decisions relating to the creation, acquisition and replacement of assets on the Railways are processed through the 3 different Programmes

 

Rolling Stock Programme- RSP	Machinery & Plant- M&P	Works Programme
Plan Head 21	Plan Head 41	Remaining Plan Heads
Click for article in this Blog	Will be Posted in this Blog	Present article

 

  Works Programme - 4 Stages

 

I		II		III		IV
Advance Planning		Advance Scrutiny of Major Schemes		PWP		FWP

 

Stage One - Formulation of Schemes as a part of Advance Planning:

 

      Works Programme is not an isolated exercise for the year, but is part of a continuous planning process from the level of Division to Railway Board.

      Divisions - Plan for such works - either improvement in operations or remove bottlenecks etc within the Division itself.

      Zonal Railway or Railway Board - Major Investment proposals which benefit a Zonal Railway or the Indian Railways as a whole should be planned.

      New Lines, GC, Doubling & Other Line capacity works - Rs. 5 Crores and above - Detailed Traffic & Engineering Surveys should be carried out.

      New Marshalling yards, Goods terminals, Tranship yards -  Work study teams should go into the actual working before proposed.

      Rate of Return - 10 % and above

      When number of works - to achieve common objective - The ROR for entire scheme should be worked out.

      If the Work covers two Zonal Railways, the Zonal Railway in which the major portion of the work falls should obtain figures from the contiguous /neighboring Zonal Railway for submitting joint figures of cost and financial implication i.e., ROR to the Railway Board.

Stage Two - Advance Scrutiny of major schemes before PWP

      All schemes costing Rs. 20 lakhs or above  - worked out comprehensively with full details such as

1.       Technical features

2.       Cost break up

3.       Benefits expected to accrue

4.       ROR

5.       Sketch map

 

      Zonal Railways ensured that the cost of the project have been arrived at after the fullest possible investigation incl: ROR.

      After scrutinized by Railway Board, the Zonal Railways should be advised of the acceptance with or without any modifications for inclusion in the PWP.

      Track Renewal works - Rs. 20 lakhs and above - Proposals should comprise 1) Traffic density 2) Age of Track  3) Condition of Track components.  These are initially scrutinizing keeping in view of the availability of P.Way materials, Progress of works already sanctioned etc, before inclusion in the PWP.

Stage Three - PWP - Preliminary Works Programme

 

       PCE - Principal Chief Engineer  - Responsible for preparation & submission of PWP in Zonal Railway

      The overall priorities within the ceilings given by the Railway Board  - fixed by PCE duly consulting GM and other PHODs

       Railway Board lay down the financial limits under Various Plan Heads.  Zonal Railways has to make out their programmes for the following year duly vetted by the PFA.

       Permissible Cost (PC) = Ceiling (C)  X Norms (N)  - Throw Forward (TF)

      Ceiling = The Lumpsum Grant allocated to a particular Division. 

      Norms = Likely Period of completion of works as per Norms stipulated by the Railway Board for PWP.

      Throw Forward = Throw Forward of ongoing works under Each Plan Head.

        June / July Each Year - Railway Board should convey the total outlay under each Plan Head within which the Works Programme should be framed by the Zonal Railway.

      Preference should be given to Works in Progress.

      Definition of Works in Progress: A work which has been sanctioned and for which funds have been allotted whether in the original or supplementary budget of a year should be treated as a "work in progress" for the next year.

      Select the New works which are expected to yield the maximum benefit(ROR) to the Railway.

      1st September or any date fixed by the Board - Submission of PWP to the Railway Board with proper financial appraisal of each work together with comments of PFA.

      Project cost  - Based on firm data both as to quantity and rates at current price levels.  Also consider the increase in prices during the intervening period between PWP and FWP.  But no other increase on account of change in scope of the Project should be allowed.

      Each investment proposal should be accompanied by a detailed plan showing the scheduling of the project to match the traffic requirements and the financial outlay proposed for the year  - for realistic funds allocation by the Railway Board.

      The Works Programme is compiled in the following format :-

Form E. 618

Works Programme 2020-21

 

    Demand No...............................                                 Figures in thousands of rupees)

Item No.	Authority	Particularsof Works	Cost	Expenditure to end of 3/2019	Outlay for		Balance
					2019-20	2020-21
1	2	3	4	5	6	7	8

Note :--Years have been shown in the form for the purpose of illustration.

 

Stage IV -  Final Works Programme - FWP

 

 

      After examining the Individual Railways PWP and discussions with the GMs, the Railway Board will decide the works which should be undertaken during the following years FWP.

       The Zonal Railways will modify their PWPs as a result of the Railway Board's decision and send their FWP to the Railway Board by the stipulated date.

      The Demand shall be for gross expenditure, the credits or recoveries being shown in the form of footnotes to Demands.

 

FWP 2020-21 Salient features:

      Focus should be on completion of already sanctioned works (Works in Progress) so as to complete them in a time bound manner and utilize the investment made by Railways.

      Review of works which are sanctioned, but not commenced till now in spite of lapse of considerable time.  Such works might have lost relevance in the present scenario and need to be dropped.

      New Work should propose only  - When the proposed work cannot be deferred for next year.

      New works shall be sanctioned only as "Umbrella Work"  Click for article

      Zonal Railways should limit their works proposals , as the new Umbrellas shall generally be lower than the previous year by at least 50%  (except for Safety works)

 

 IRPSM

 

Ø  Full form is “Indian Railways Projects Sanctions & Management.

 

Ø  That means it has two broad divisions.  1) Sanctioning of new projects i.e., Works Programme  and 2) Management/Monitoring of such sanctioned Projects.

 

Ø  Web based application i.e., usable only with an internet connection and uses HTTP (Hyper-Text Transfer Protocol) as its primary communication protocol.

 

Ø  Developed by CRIS, New Delhi ( All the system administration functions, viz Operating System, Database, Application Server besides day to day operation – responsibility of CRIS)

 

OBJECTS OF IRPSM

 

Ø  Online creation and forwarding of “NEW WORKS” proposals from the Zonal Railways and Production Units to the Railway Board duly replacing the exsting manual system.

 

Ø  Modifications to the “Works in Progress”

 

Ø  Printing of Works programme, Pink Book and other sanction books after sanction by Railway Board.

 

Ø  Monthly updation of status of various works by Executing agencies like Sr.DEN, Sr.DOM etc.

 

Ø  Monitoring of all Works/Projects.

TYPES OF USERS

LEVEL/USER	PLAN HEAD CO ORDINATOR	WORKS PROGRAMME CO ORDINATOR	SANCTIONING AUTHORITY
DIVISION	Branch officers like Sr.DOM, Sr.DME etc	Sr.DEN/Co	DRM
ZONAL RAILWAY	PHODs	CPDE – Chief Planning & Design Engineer	GM
RAILWAY BOARD	-	EDCE(G) – Executive Director Civil Engineering (General)	Railway Board & Minister for Railways

 

List of Plan Heads and Plan Head Co-ordinators

 

PH No	PH Name	Plan Head Co-ordinator
		Divisional	Zonal Rly/PU
11	New Lines	Sr.DOM	COM
14	Gauge Conversion
15	Doubling
16	Traffic Facilities
35	Electrification Projects
81	Metropolitan transport projects

 

PH No	PH Name	Plan Head Co-ordinator
		Divisional	Zonal Rly/PU
29	Level Crossing Gates	Sr.DEN/Co	CTE
30	ROB/RUB		CBE
31	Track Renewals		CTE
32	Bridge Works		CBE
51	Staff Quarters		PCE
52	Staff Amenities		PCE
64	Other Specified works		PCE

 

PH No	PH Name	Divisional	Zonal Rly/PU
17	Computerisation	Sr.EDP	CCM
33	S & T	Sr.DSTE	CSTE
36	Other Electrical Works	Sr.DEE	CEE
42	Workshops	Sr.DME	CWE
53	Passenger amenities & other rly. User amenities	Sr.DCM	CCM

 

IRPSM @ DIVISIONAL LEVEL

 

Ø  Creation of “New Works” proposal with justification & Abstract Cost.

Ø  Forward to Finance (Sr.DFM) for vetting

Ø  Sanction of Proposal  - by DRM (if within DRM powers)

Ø  Forwarding of proposals to Zonal Railway ( If beyond DRM’s powers)

Ø  Adding all the Works sanctioned under DRMs powers – to the list of “IN PROGRESS” works in IRPSM.

Ø  Assigned unique Project ID as explained below.

Ø  Reporting of status every month for each work by respective Exexutive Agency.

Ø  Generation & Printing (if desired only) of Works Programme reports.

 

IRPSM @ ZONAL RAILWAY LEVEL

 

Ø  Examination and processing of  “New Works” proposals as received from Divisions will be forwarded by CPDE – Chief Planning & Designs Engineer the respective Zonal Plan Head Co ordinators.

Ø  Creation of “New Works” proposals.

Ø  Forward to Finance (FA&CAO) for vetting.

Ø  The vetted proposals forwarded by Plan Head Co ordinators will be checked and then forwarded to GM through PCE for Sanction.

Ø  Sanction of Proposal  - by GM (if within GM powers)

Ø  Forwarding of proposals to Railway Board ( If beyond GMpowers)

Ø  Adding all the Works sanctioned under GM powers – to the list of “IN PROGRESS” works in IRPSM.

Ø  Assigned unique Project ID as explained below.

Ø  Defining Funds availability & Sanction limits for Zonal Railway HQ & Divisions.

Ø  Reporting of status every month for each work by respective Exexutive Agency.

Ø  Generation & Printing (if desired only) of Works Programme reports.

 

IRPSM @ Railway Board Level

 

Ø  Forwarding of proposals received from Zonal Railways by EDCE(G) to Nodal Directorates for respective Plan Heads.

Ø  On line shortlisting, Recommedning & Forwarding to EDCE(G)

Ø  Above 5 Crores each -  Proposals forwarded by Nodal Directorates to EDF(X) – I & II for Finance Concurrence.

Ø  Below 5 Crores each – Online shortlisting, recommending & forwarding to EDCE(G) by Nodal Directorates through concerned AMs (Additional Members) for Plan Heads.

Ø  Compiliation of all shortlisted proposals (Below 5 Crores each) by EDCE(G) for meeting of AM’s committee

Ø  At any time, ON LINE YELLOW SLIP can be attached on-line and file can be moved out of the normal path for consultation.  All yellow slip communiations will be kept off the general record. provision for the off-the-record consultation on Proposals.

Ø  Such shortlisted & recommended proposals for each Plan Head with On line consent and remarks of Finance will be processed by Nodal Directorates through EDCE(G) on the file for approval of Board & Hon’ble Minister for Railways.

Ø  Assigned unique Project ID as explained below.

UNIQUE PROJECT ID  - 14 DIGIT

1	2	3	4	5	6	7	8	9	10	11	12	13	14
Zonal Rly		Division		Plan Head		Year of sanction		Authority sanctioned (like GM,DRM etc)	Executing Agency (Like Sr.DEN or Sr.DOM)		Serial Number

 

UNIQUE PROJECT ID  - 14 DIGIT  -

an example of Passenger Amenities Work (Plan Head 51) Sanctioned by GM in Mumbai Division of Central Railway

0	1	0	2	5	1	1	6	3	0	0	0	0	7
Central Railway		Mumbai Division		Plan Head		2016-17		GM	Not identified		Serial Number

 

Hence Project ID for the above work is “01025116300007”

ADVANTAGES OF IRPSM

Ø   A paperless office .  All files will move online without involvement of physical files.

Ø  Completely reduce transit time of file from one office to another.  Proposals reach Boards office within no time.

Ø  All requisite justification, plans, drawings, sanctions and permissions will be attached to the proposals.

Ø  Online monitoring the work in progress of all the works.

***