Saturday, August 15, 2026

80th Happy Independence Day - 15th August 2026

GK for LDCE

## Independence Day – 15 August

1. India attained independence from British rule on 15 August 1947.

2. The Indian Independence Act, 1947 provided for the creation of two independent Dominions—India and Pakistan.

3. Jawaharlal Nehru became the first Prime Minister of independent India.

4. Nehru delivered the historic “Tryst with Destiny” speech at midnight on 14–15 August 1947.

5. Lord Mountbatten was the last Viceroy of British India and the first Governor-General of independent India.

6. The Constituent Assembly adopted the present National Flag on 22 July 1947.

7. The National Flag was based on a design associated with Pingali Venkayya.

8. On Independence Day, the Prime Minister unfurls the National Flag and addresses the nation from the Red Fort, Delhi.

9. The President of India addresses the nation on the eve of Independence Day—14 August.

10. India celebrates its 80th Independence Day on 15 August 2026. The country completes 79 years of independence

📌 Examination Trap

Independence Day → 15th August → Prime Minister → Red Fort → Flag hoisted & unfurled

Republic Day → 26th January → President → Kartavya Path → Flag unfurled only

Appendix3 Academy

8247012698

MCQ application

Friday, August 14, 2026

SPV - Special Purpose Vehicle Bilingual with MCQs

SPV Special Purpose Vehicle

EXAM DEFINITION: An SPV is a separate legal entity created for a specific, clearly defined and limited purpose. It is legally distinct from its sponsor or parent entity.

Key Takeaways

Separate legal identity: An SPV has a legal personality distinct from its sponsor, shareholders or members.
Limited purpose: It is established for a specific project, transaction or narrow set of objectives.
Risk isolation: Selected assets, liabilities and activities can be separated from the sponsor's other operations.
Project finance: It is commonly used to finance and execute large infrastructure or other ring-fenced projects.
Fund raising: An SPV may raise finance against project cash flows, assets or future receivables, subject to the transaction structure.
Independent obligations: Its assets and liabilities belong to the SPV; they are not automatically those of its shareholders.

How an SPV Works

A sponsor creates the SPV and defines its objects.
The sponsor may transfer specified assets, rights, contracts or activities to it.
The SPV raises funds and carries out the designated project or transaction.
Ring-fencing helps lenders and investors assess the project's own risks and cash flows separately from the sponsor's general business.

Important Terms

Term	Meaning
SPV	Special Purpose Vehicle
SPE	Special Purpose Entity; a commonly used alternative term, especially in the United States
SPC	Special Purpose Company or Special Purpose Corporation, depending on usage and jurisdiction
FVC	Financial Vehicle Corporation; a specialised statistical/legal term in some jurisdictions, not a universal synonym for every SPV

Caution: Risk isolation is not absolute. Its effectiveness depends on the SPV's legal structure, contracts, guarantees, ownership and applicable law. An SPV is therefore not automatically protected from every insolvency risk.

Main Advantages

Separates project risk from the sponsor's other business risks.
Facilitates project-specific financing and transparent cash-flow assessment.
Provides a focused governance and contractual structure for a defined objective.
May improve lender and investor confidence when assets and revenues are properly ring-fenced.

Examples in India

Entity	Full Name	Purpose / Status
NHSRCL	National High Speed Rail Corporation Limited	Active SPV for financing, constructing, maintaining and managing high-speed rail corridors; joint-sector participation of the Ministry of Railways and the Governments of Gujarat and Maharashtra.
L&TMRHL	L&T Metro Rail (Hyderabad) Limited	SPV and concessionaire established for the Hyderabad Metro Rail project.
IRSDC	Indian Railway Stations Development Corporation Limited	Historical railway SPV for station redevelopment; closed by the Ministry of Railways in 2021.

Multiple-Choice Questions

1. What is the primary purpose of creating an SPV?

A) To undertake a specific and limited objective

B) To conduct every activity of the sponsor

C) To abolish the sponsor

D) To avoid maintaining accounts

2. Which feature most clearly distinguishes an SPV from an internal department of a company?

A) It has no defined objective

B) It has a separate legal identity

C) It cannot own assets

D) It must be wholly government-owned

3. In project finance, ring-fencing mainly means:

A) Mixing all project and sponsor funds

B) Separating specified project assets, liabilities and cash flows

C) Cancelling all project risks

D) Removing all legal controls

4. Which statement about an SPV is correct?

A) It is always immune from insolvency

B) Its liabilities automatically become the liabilities of every shareholder

C) It may raise funds against project cash flows or future receivables

D) It can never be used for infrastructure projects

5. NHSRCL is associated primarily with:

A) Hyderabad Metro Rail

B) High-speed rail corridors

C) Station catering

D) Railway recruitment

6. Which of the following is a historical SPV that was closed by the Ministry of Railways in 2021?

A) NHSRCL

B) L&TMRHL

C) IRSDC

D) None of these

Fill in the Blanks

1) SPV stands for ______________________________.

2) An SPV is created for a specific and usually __________________ purpose.

3) The separation of specified project assets and risks is commonly called __________________.

4) SPE stands for Special Purpose __________________.

5) The correct acronym for National High Speed Rail Corporation Limited is __________________.

6) L&TMRHL is associated with the __________________ Metro Rail project.

Answers

Multiple-Choice Questions: 1-A, 2-B, 3-B, 4-C, 5-B, 6-C

Fill in the Blanks: 1. Special Purpose Vehicle 2. limited / narrow 3. ring-fencing 4. Entity 5. NHSRCL 6. Hyderabad

Authority Notes

National High Speed Rail Corporation Limited, official Project Overview and About NHSRCL pages.
L&T Metro Rail (Hyderabad) Limited, official 'Who We Are' page.
Ministry of Railways (Railway Board), Closure of IRSDC, October 2021.

एसपीवीविशेष उद्देश्य वाहन

परीक्षा परिभाषा: एक एसपीवी एक विशिष्ट, स्पष्ट रूप से परिभाषित और सीमित उद्देश्य के लिए बनाई गई एक स्वतंत्र कानूनी इकाई है। यह कानूनी रूप से अपने प्रायोजक या मूल इकाई से भिन्न होती है।

चाबी छीनना

· पृथक कानूनी पहचान: एक एसपीवी की अपने प्रायोजक, शेयरधारकों या सदस्यों से अलग एक कानूनी पहचान होती है।

· सीमित उद्देश्य: इसे किसी विशिष्ट परियोजना, लेनदेन या सीमित उद्देश्यों के लिए स्थापित किया जाता है।

· जोखिम पृथक्करण: चयनित परिसंपत्तियों, देनदारियों और गतिविधियों को प्रायोजक के अन्य कार्यों से अलग किया जा सकता है।

· परियोजना वित्त: इसका उपयोग आमतौर पर बड़े बुनियादी ढांचे या अन्य प्रतिबंधित परियोजनाओं के वित्तपोषण और निष्पादन के लिए किया जाता है।

· धन जुटाना: एक एसपीवी लेनदेन संरचना के अधीन, परियोजना के नकदी प्रवाह, परिसंपत्तियों या भविष्य की प्राप्तियों के आधार पर वित्त जुटा सकता है।

· स्वतंत्र दायित्व: इसकी संपत्तियां और देनदारियां एसपीवी की हैं; वे स्वतः ही इसके शेयरधारकों की नहीं हो जातीं।

एसपीवी कैसे काम करता है

· एक प्रायोजक एसपीवी बनाता है और उसके उद्देश्यों को परिभाषित करता है।

· प्रायोजक निर्दिष्ट परिसंपत्तियों, अधिकारों, अनुबंधों या गतिविधियों को इसे हस्तांतरित कर सकता है।

· एसपीवी धनराशि जुटाता है और निर्दिष्ट परियोजना या लेनदेन को अंजाम देता है।

· रिंग-फेंसिंग से उधारदाताओं और निवेशकों को प्रायोजक के सामान्य व्यवसाय से अलग परियोजना के अपने जोखिमों और नकदी प्रवाह का आकलन करने में मदद मिलती है।

महत्वपूर्ण नियम और सावधानियां

अवधि	अर्थ
एसपीवी	विशेष उद्देश्य वाहन
एसपीई	विशेष प्रयोजन इकाई; एक सामान्य रूप से प्रयुक्त वैकल्पिक शब्द, विशेष रूप से संयुक्त राज्य अमेरिका में
छठे वेतन आयोग	उपयोग और अधिकार क्षेत्र के आधार पर इसे विशेष प्रयोजन कंपनी या विशेष प्रयोजन निगम भी कहा जा सकता है।
एफवीसी	वित्तीय वाहन निगम; कुछ न्यायक्षेत्रों में प्रयुक्त एक विशेष सांख्यिकीय/कानूनी शब्द है, न कि प्रत्येक एसपीवी के लिए सार्वभौमिक पर्यायवाची।

सावधानी: जोखिम पृथक्करण पूर्णतः सुरक्षित नहीं है। इसकी प्रभावशीलता एसपीवी की कानूनी संरचना, अनुबंधों, गारंटियों, स्वामित्व और लागू कानून पर निर्भर करती है। इसलिए, एसपीवी स्वतः ही दिवालियापन के हर जोखिम से सुरक्षित नहीं हो जाती।

मुख्य लाभ

यह परियोजना के जोखिम को प्रायोजक के अन्य व्यावसायिक जोखिमों से अलग करता है।
एफयह परियोजना-विशिष्ट वित्तपोषण और पारदर्शी नकदी प्रवाह मूल्यांकन को सुगम बनाता है।
यह एक परिभाषित उद्देश्य के लिए केंद्रित शासन और संविदात्मक संरचना प्रदान करता है।
परिसंपत्तियों और राजस्व को उचित रूप से सुरक्षित रखने से ऋणदाताओं और निवेशकों का विश्वास बढ़ सकता है।

भारत में उदाहरण

इकाई	पूरा नाम	उद्देश्य / स्थिति
एनएचएसआरसीएल	नेशनल हाई स्पीड रेल कॉर्पोरेशन लिमिटेड	हाई-स्पीड रेल कॉरिडोर के वित्तपोषण, निर्माण, रखरखाव और प्रबंधन के लिए सक्रिय एसपीवी; रेल मंत्रालय और गुजरात तथा महाराष्ट्र सरकारों की संयुक्त क्षेत्र भागीदारी।
एल एंड टीएमआरएचएल	एल एंड टी मेट्रो रेल (हैदराबाद) लिमिटेड	हैदराबाद मेट्रो रेल परियोजना के लिए एसपीवी और रियायतकर्ता की स्थापना की गई।
आईआरएसडीसी	भारतीय रेलवे स्टेशन विकास निगम लिमिटेड	स्टेशन के पुनर्विकास के लिए ऐतिहासिक रेलवे एसपीवी; रेल मंत्रालय द्वारा 2021 में बंद कर दिया गया।

बहु विकल्पीय प्रश्न

1. एसपीवी बनाने का प्राथमिक उद्देश्य क्या है?

ए) एक विशिष्ट और सीमित उद्देश्य को पूरा करना

बी) प्रायोजक की प्रत्येक गतिविधि का संचालन करना

सी) प्रायोजक को समाप्त करना

डी) खातों का रखरखाव करने से बचने के लिए

2. कौन सी विशेषता किसी एसपीवी को कंपनी के आंतरिक विभाग से सबसे स्पष्ट रूप से अलग करती है?

ए) इसका कोई परिभाषित उद्देश्य नहीं है

बी) इसकी एक अलग कानूनी पहचान है

सी) यह संपत्ति का मालिक नहीं हो सकता

डी) यह पूरी तरह से सरकार के स्वामित्व में होना चाहिए

3. परियोजना वित्तपोषण में, रिंग-फेंसिंग का मुख्य अर्थ है:

ए) सभी परियोजना और प्रायोजक निधियों को मिलाना

बी) निर्दिष्ट परियोजना परिसंपत्तियों, देनदारियों और नकदी प्रवाह को अलग करना

सी) परियोजना के सभी जोखिमों को रद्द करना

डी) सभी कानूनी नियंत्रणों को हटाना

4. एसपीवी के बारे में कौन सा कथन सही है?

ए) यह दिवालियापन से हमेशा सुरक्षित रहता है।

बी) इसकी देनदारियां स्वतः ही प्रत्येक शेयरधारक की देनदारियां बन जाती हैं।

सी) यह परियोजना के नकदी प्रवाह या भविष्य में प्राप्त होने वाली राशियों के आधार पर धन जुटा सकता है।

डी) इसका उपयोग कभी भी अवसंरचना परियोजनाओं के लिए नहीं किया जा सकता है।

5. एनएचएसआरसीएल मुख्य रूप से निम्नलिखित से संबंधित है:

ए) हैदराबाद मेट्रो रेल

बी) हाई-स्पीड रेल कॉरिडोर

सी) स्टेशन कैटरिंग

डी) रेलवे भर्ती

6. निम्नलिखित में से कौन सा एक ऐतिहासिक एसपीवी है जिसे रेल मंत्रालय द्वारा 2021 में बंद कर दिया गया था?

ए) एनएचएसआरसीएल

बी) एल एंड टीएमआरएचएल

सी) आईआरएसडीसी

D) इनमें से कोई नहीं

रिक्त स्थान भरें

1) SPV का पूरा नाम ______________________________ है।

2) एक एसपीवी एक विशिष्ट और आमतौर पर __________________ उद्देश्य के लिए बनाया जाता है।

3) निर्दिष्ट परियोजना परिसंपत्तियों और जोखिमों के पृथक्करण को सामान्यतः __________________ कहा जाता है।

4) एसपीई का मतलब स्पेशल पर्पस __________________ है।

5) नेशनल हाई स्पीड रेल कॉर्पोरेशन लिमिटेड का सही संक्षिप्त रूप __________________ है।

6) एल एंड टीएमआरएचएल __________________ मेट्रो रेल परियोजना से संबद्ध है।

जवाब

बहु विकल्पीय प्रश्न: 1-ए, 2-बी, 3-बी, 4-सी, 5-बी, 6-सी

रिक्त स्थान भरें:1. विशेष प्रयोजन वाहन 2. सीमित / संकीर्ण 3. घेराबंदी 4. इकाई 5. एनएचएसआरसीएल 6. हैदराबाद

प्राधिकारी नोट्स

· नेशनल हाई स्पीड रेल कॉर्पोरेशन लिमिटेड के आधिकारिक प्रोजेक्ट ओवरव्यू और एनएचएसआरसीएल के बारे में पेज।

· एल एंड टी मेट्रो रेल (हैदराबाद) लिमिटेड का आधिकारिक 'हम कौन हैं' पृष्ठ।

· रेल मंत्रालय (रेलवे बोर्ड), आईआरएसडीसी का बंद होना, अक्टूबर 2021।

Thursday, August 13, 2026

Revenue Primary Units - Transport Allowance, Transfer Allowance & Traveling Expenses

Classification of Expenditure – Revenue Primary Units

PU 07 – Transport Allowance - For regular travel between residence and office. Remember: Daily commute

PU 15 – Transfer Allowance - For expenses relating to transfer from one station to another or retirement. Remember: Shift to another station

PU 16 – Travelling Expenses - For expenses incurred on an official tour outside headquarters. Remember: Official tour and return

Wednesday, August 12, 2026

Ratios and Parameters in Indian Railways - OR, PEI, TOR, SFC & SEC

Parameters in IR -

OR, PEI, TOR, SFC & SEC

By Nageswara Rao, 9492432160

O.R. - Operating Ratio

" What cannot be measured, cannot be managed" By Peter Drucker/ Deming

"If you cannot measure it, you can’t improve it" By Lord Kelvin

Questions:

1. What is Operating Ratio? How it is calculated?

2. Computation of the Operating Ratio from the set of figures given in the problem.

3. Is the OR, the best financial ratio to show the performance of Railways? If the answer is No, what is the reason and which one is the alternative one?

4. Can we extend the O.R to the Divisions in replacement of PEI (Performance Efficiency Index)? If so what are the mechanisms and the benefits that accrue to Railways?

Now let's check the answers:

1. What is the Operating Ratio? How it is calculated?

Codal provisions - Para 308 & 434 of I.Rly.Finance Code.

It is regarded as one of the Most Important financial statistics/ratios and has frequently been used as an Index of the operating efficiency of the Railways.

Definition of O.R.: Percentage of Gross Working Expenses to Gross Earnings of any accounting year.

In simple terms, the Operating ratio is the number of rupees spent to earn every 100 Rupees.

If O.R. is less than 100 = Organisation is in profits.

If O.R. is more than 100 = Organisation is at loss.

Definition of Gross Working Expenses (GWE): Ordinary Working Expenses-OWE (erstwhile Demands 3 to 13) plus Appropriations to DRF-Depreciation Reserve Fund and Pension Fund.

Note: True expenses in an accounting period whether or not actually disbursed. That means excludes Suspense. That is Accrued expenses.

Definition of Gross Earnings: Coaching Earnings (Abstract X) + Goods Earnings (Abstract Y) + Sundry other Earnings (Abstract Z)

Note: true or accrued earnings in an accounting period whether or not actually realised. That means excludes Suspense.

Always considered Apportioned Earnings instead of Originating Earnings.

Gross Working Expenses

O.R = _______________________ x 100

Gross Earnings

There is no ideal Operating Ratio for Indian Railways. In the railroad sector, an operating ratio of 80 or lower is considered desirable.

Advantages of Lower OR: Helps in generating internal resources for meeting requirements of Plan Expenditure on Safety (RSF), Amenities to Passengers & Staff (D.F), and other Capital investments such as laying of new lines, acquisition of Rolling Stock, etc (Capital Fund).

In the year 2005, Indian Railways, changed its accounting policy for the lease charges. The lease charges have been broken into two parts - capital and revenue. While revenue has been charged to working expenses (Demand No.9G), the capital portion is separately provided for in the capital budget ( Plan Head 2200-Leased assets - Payment of capital component of lease charges to IRFC, etc.). This has resulted in the reduction of working expenses and the operating ratio.

Measures to be taken to achieve the Lower/efficient O.R. are

Maximizing the traffic earnings inter-alia including rationalization of fare and freight tariff;
Effective marketing strategies to capture more and more traffic;
Creation of additional capacity
Optimum utilization of the existing rail infrastructure.
Contain the expenditure through diverse means including strict economy and austerity measures;
Improved manpower planning;
Inventory management;
Optimizing the fuel consumption.

The Best ever O.R of Indian Railways was 74.7 % in 1963-64.

Last few years O.R. of Indian Railways is

2015-16 - 91.25 %

2016-17 - 90.48 %

2017-18 - 96.5 %

2018-19 - 98.44 %

2019-20 - 97.29 %

2020-21- 98.36 %

2021-22 -98.93 % (Target)

2023-24 - 98.43 %

2024-25 - 98.22 %

2025-26 - 98.82% (RE - Revised Estimates)

2026-27 - 98.40% (BE - Budget Estimates)

Comparing O.R of Indian Railways with other countries ' railway's systems - Not possible due to different computation methodologies across different countries thus reducing the validity of comparison of such statistical figures.

Glossary - Excerpts from Finance Code Para No.308 - better to understand Operating Ratio and Railway finances.

Credit Side		Debit Side	Net of Credit & Debit
(i) Coaching Earnings (less refunds)		(x) Ordinary Working Expenses = Expenses booked under final heads, excluding appropriation to DRF & Pension Fund
(ii) Goods Earnings (less refunds)		(xi) Appropriation to Depreciation Reserve Fund.
(iii) Traffic Earnings = (i)+(ii)		(xii) Appropriation to Pension Fund.
(iv) Sundry Other Earnings / Other than Traffic Earnings.
(v) Gross Earnings = (iii)+(iv) = true or accrued earnings in an accounting period whether or not actually realized.		(xiii) Gross Working Expenses = (x)+(xi)+(xii) = True expenses in an accounting period whether or not actually disbursed.	(xviii) Net Earnings =(v) - (xiii) O.R = (Xiii) /(v) x 100
(vi) Suspense.		(xiv) Suspense.
(vii) Gross Receipts = (v)+(vi) = Earnings actually realized during an accounting period.	271	(xv) Gross Expenditure = (xiii) + (xiv) = Working Expenses actually disbursed during an accounting period.
(viii)Misc. Receipts = Guarantee recoverable from State Govts. + Other Misc. Receipts, such as Govt. share of surplus profits, sale of land of subsidized companies, receipts from surcharge on Passenger fares, etc.		(xvi) Misc. expenditure = Surveys + Land for subsidized companies; subsidy + other Miscc Railway expenditure, Appropriations to Pension Fund relating to Railway Board and Miscc establishments booked under grants 1 & 2 and payments to worked lines.
(ix) Total Revenue Receipts = (vii)+(viii).		(xvii) Total Revenue Expenditure = (xv)+(xvi).	(xix) Net Receipts = (ix) - (xvii).

Net Receipt is nothing but Surplus. (Till 2017-18, Net Receipts minus Dividends is equal to Surplus. From 2017-18 onwards, the Dividend payment is not required due to the merger of the Railway Budget with the General Budget)

Appropriation of Surplus: The surplus will be appropriated to Development Fund, Railway Safety Fund, Capital Fund, RRSK, and latest created fund " Railway Liability Reserve Fund.

Comparing O.R of different Zonal Railways: It is not possible to compare the O R of one Zonal Railway with another Zonal Railway due to several factors such as Floods, Accidents, and other special factors. Hence it is better to compare OR of a particular Zonal Rly on Year - Over - Year (YOY) basis.

In simple terms, the Operating Ratio is calculated based on the following glossary terms only

Denominator	Numerator (Gross Working Expenses)
Gross Earnings	OWE - Ordinary Working Expenses i.e., erstwhile Demands 3 to 13 and Appropriation to DRF & Pension Fund i.e., erstwhile D.No.14

Formulae of OR = Gross Working Expenses \ Gross Earnings x 100

Forget the following Glossary terms of calculation of O.R.

2. Working out the following from the set of figures as given below.

i) Operating Ratio ii) Net Receipts or Surplus/Shortfall

Details	Amount(In Crores of Rs.)
1. Gross Receipts	1400
2. Suspense - Earnings	150
3. Misc. Receipts	50
4. Expenditure (Actual basis)	800
5. Suspense - expenses	(- ) 50
6. Appropriation to DRF	65
7.Appropriation to Pension Fund	85
8. Misc. Expenditure	25
9. Appropriation to D.F.	150
10. Appropriation to R.S.F.	100
11. Appropriation to Capital Fund	150

Solution:

i) Operating Ratio

Formulae of OR = Gross Working Expenses / Gross Earnings x 100

Gross Earnings = Gross Receipts minus Suspense

Hence 1400 - 150 = 1250 is Gross Earnings.

Gross Working Expenses = Ordinary Working Expenses(OWE) + App. to DRF & P.F

Ordinary Working Expenses ( OWE) = Actual Expenditure minus Suspense

= 800 - (-) 50 = 850 (Note: Minus of Minus = Plus)

Gross Working Expenses = OWE + App. to DRF & Pension Fund.

Gross Working Expenses = 850 + 65 + 85 = 1000

Hence O.R . = 1000 / 1250 x 100 = 80 %

ii) Net Revenue

Net Revenue = Total Revenue Receipts - Total Revenue Expenditure

Total Revenue Receipts = Gross Receipts + Misc Receipts.

= 1400 + 50 = 1450

Total Revenue Expenditure = Gross Expenditure + Misc. Expenditure

Gross Expenditure = 800 + 65 + 85 = 950 and Misc. Expenditure = 25

Total Revenue Expenditure = 950 + 25 = 975

Net Revenue/Net Receipts/Surplus = Total Revenue Receipts - Total Revenue Expenditure

Net Revenue/Net Receipts/Surplus = 1450 - 975 = 475

Note: Appropriation to Development Fund, Railway Safety Fund & Capital Fund will not be considered for calculation of Operating Ratio/Net Revenue/Surplus.

3. Is OR, best financial ratio to show the performance of Railways ? If the answer is No, what is the reason and which one is the alternative one?

It is true, that the Operating Ratio itself is not a perfect indicator for judging the efficiency of Indian Railways.

Let's see the below hypothetical illustration of two Railways.

Rly.	Capital at Charge	Gross Earnings	Gross Working expenses	O.R.	ROR- Rate of Return/ROCE-Return on Capital Employed
A	1000	200	150	75 %	5 % i.e., Rs.50 profit on Capital of Rs.1000
B	5000	2000	1600	80 %	8 % i.e., Rs.400 profit on Capital of Rs. 5000

Considering the Operating Ratio as an efficient indicator, Railway "A" is more efficient than Railway "B". But taking ROR/ROCE i.e., an indicator of utilization of Capital, Railway "B" is more efficient than Railway "A".

If so, as mentioned in Para 511 of Indian Railways Administration and Finance - An Introduction, Return on Capital i.e., percentage of (revenue) surplus to Capital-at-charge is the true indicator to judge the financial performance of Indian Railways.

Revenue Surplus = Net Receipts (actual basis) after adjusting misc receipts and misc expenditure (item xxi of para 308-Finance Code)

Capital at Charge means "the Central Government's investment in the Railways by way of Loan Capital and value of the assets created therefrom. (item xxii of para 308-Finance Code).. However, it is zero after the merger of the Railway Budget with the General Budget from 2017-18 onwards

To sum up, the combination of the above two Ratios will be considered to evaluate the performance of the Railways instead of the Operating Ratio alone.

Operating Ratio is helpful for comparing the Railways' efficiency of Year-over-year(YOY) as well as evaluating the Inter-Zonal comparison among different Zonal Railways in India.

4. Can we extends the O.R to the Divisions in replacement of PEI (Performance Efficiency Index)? If so what are the mechanisms and the benefits that accrue to Railways?

DIVISIONS and PEI - Performance Efficiency Index

At present, PEI is the performance indicator in the Divisions ( like OR-Operating Ratio for Zonal railways)

As of today, OR is not being calculated for Divisions and thus they cannot be treated as “Profit Centers”.

PEI = a ratio of Demands 3 to 12 and Originating Earnings x 100

That means, unlike Operating Ratio, Appropriation to DRF and Pension Fund will not be considered for calculating PEI. Also Apportioned Earnings not considered for calculating PEI.

Demands 3 to 12

PEI of Division = _______________________ x 100

Originating Earnings

Differences between
Operating Ratio - O R	Performance Efficiency Index – PEI
1. D.No. 3 to 13 considered	1. D.No. 3 to 12 only considered.
2. Taken into the Apportioned Earnings	2. Taken into the Originating Earnings.
3. Appropriation to DRF & Pension Fund are considered.	4. Not taken into the account of appropriation to DRF & Pension Fund.
For Zonal Railways	For Divisions

Note: In some Zonal Railways like SCR, D.No.13 is also included for calculating PEI.

So, the drawbacks and their solutions for computing the Operating Ratio of their respective Divisions are

1. Appropriation to DRF -

Appropriation to DRF from the Division can be computed as Capital at Charge on the Division / Capital at Charge on the Zone x Appropriation to DRFF for the Zone.


2. Appropriation to Pension Fund - It would be possible to calculate the Appropriation to Pension Fund from the Division based on the Pensionable employees on Division /Pensionable employees on the Zone x Appropriation to Pension Fund.

3. Apportioned Earnings - Right now, based on the proportionate distance of consignment or passenger traveled over the Zonal Railways, the apportioned earnings can be calculated for the Zonal Railways. The same mechanism will apply for calculating apportioned earnings for the Divisions based on distances covered among Divisions within a Zonal Railway. With the help of Computers, it can be a very easy exercise.

If we address the above drawbacks incorrect approach as stated above, Divisions also can able compute Operating Ratio (OR) and became Profit Centers similar to Zonal Railways.

Finally, it is to contemplate, if the calculation of OR is discontinued and calculate PEI for Zonal Railways too, What are the effects and advantages to the Indian Railways.

*****

Inventory Control

Covers all phases of Inventory right from Indenting to final issues to Works/Operations.
Two kinds - Periodical and Perpetual.
Helps unnecessary accumulation of materials as well as avoids blocking of Capital.
It is needless to emphasize that all inventory is money locked up forms part of Capital Suspense i.e., Stores Suspense 2071.

Pareto principle: 80:20 Rule

Baseline for ABC analysis in Indian Railways.
Also known as Always Better Control.
Fixing A, B & C categories - Based on their Average Annual Consumption in Zonal Railway.

ABC Analysis in SCR

Category	AAC valuing	Value	Quantity	Monitored by
A	Above Rs. 40 Lakhs	70 %	10 %	PCMM
B	Between Rs. 5.75 Lakhs and Rs. 40 Lakhs	20 %	20 %	CMM
C1 and C2	Below Rs. 5.75 Lakhs	10 %	70 %	Dy.CMM/SMM

Steps for better Inventory Control:

Continuous and critical reviews of balances should be done while finalizing new purchases
Invoking option clause in the Purchase Orders.
AACs are to be reviewed duly taking the changes in designs & drawings.
Taking advantage of GeM/IREPS, opt for JIT - Just In Time approach.

INVENTORY TURN OVER RATIO

TOR	2013-14	2017-18	2018-19
Without Fuel	14 %	10 %	9 %
With Fuel	8 %	8 %	6 %

TOR: Ratio of Stores Balances at the end of the financial year to Total issues during the year
TOR formulae = Stores Balances as on 31st March/Total Issues during the year x 100

Stores Balances = Stores in stock + Stores in Transit + Purchase Suspense + Sales Suspense + Stock Adjustment Account

TOR is Efficiency Indicator for Inventory Management

Ratio of Stores Balances at the end of FY divided by Total Issues during the Year.

Expressed in percentage.
Lower the Ratio betters the health of Inventory Management of a Railway or vice versa.

Stores balances mentioned in the calculation of Turnover Ratio comprise of –

Stores in Stock
Stores in Transit
Purchase Suspense
Sales Suspense
Stock Adjustment Account

Practical

1. Calculate Turn Over Ratio of ABC Railway as of 31.03.2022 from the data given below:

Total Issues during the FY 2021-22 = 5000
Stores in Stock as of 31.03.2022 - (Debit) = 700
Stores in Transit as of 31.03.2022 - (Debit)= 5
Purchase Suspense as on 31.03.2022 - (Credit) = 20
Sales Suspense as of 31.03.2022 - (Credit) = 10
Stock Adjustment Account as of 31.03.2022 - (Debit) = 75

Solution:

Turn Over Ratio Formulae

Stores Balances as on 31st March / Total Issues during the year x 100

= 700+5-20-10+75 / 5000 x 100

= 750/5000 x 100 = 15 %

Note:

Normally, TOR in Commercial firms other than Railways is calculated as below
TOR = Total Sales during the year / Average Inventory during the year
Higher the Ratio better the health of Inventory Management of an Organisation or vice versa.

****

SFC - Specific Fuel Consumption

Indicator of Fuel economy

Measured in terms of Tonne KMs

Definition: Amount of fuel consumed per unit of work done.

Measured both the Engine and the Total formation of the Train.

Lower the SFC, the Better the Fuel Economy.

Engine:

The unit of SFC for the Engine is Grams/bhp hour. Grams represent Quantity of Fuel, whereas bhp hour (brake horsepower) represents work done. .

At present, the SFC of ALCO Engine is 155 Grams and of GM Engine 150 Grams (Approx.)

ALCO stands for American Locomotive Company

GM stands for General Motors

For the locomotive, the SFC of the engine can be calculated by measuring time to calculate the Horse Power output in terms of BHP.Hr for a specific amount of fuel consumption while the engine is put on load during load box test.

This is more accurate in order to calculate engine efficiency because the output of the engine is measured at the crankshaft, neglecting all other losses of the locomotive.

There is a second method of calculating SFC, in which the amount of work done is measured in terms of Tonne Km. This is more practical because here the total losses incurred in the locomotive/ formation of train are taken into consideration for calculating the SFC.

The unit used is in liters/ 1000 GTKM. (GTKM means KM earned with the gross tonnage hauled including the weight of the locomotive).

As train resistance, air resistance and other parasitic loads of locomotive/ train varies at different speed ranges, so SFC of the locomotive is calculated with respect to its service.

Train:

Calculated per 1000 GTKMs

SFC = HSD oil in Liters / 1000 GTKMs

HSD Liters represent Quantity of Fuel, whereas 1000 GTKM represent work done.

HSD stands for High-Speed Diesel

GTKMs -Gross Tonne KMs - KMs earned with the Gross Tonnage hauled (incl: of Weight of Locomotive & Rolling Stock )

NTKMs - KMs earned with the Net tonnage hauled (excl: Weight of Locomotive & Rolling Stock)

Indian Railways -SFC 2023

Goods	2.50 Liters per 1000 GTKMs
Passenger	4 Liters per 1000 GTKMs

SFC for Shunting services - not calculated

SEC - Specific Energy Consumption

For Traction - SEC - Specific Energy Consumption = Used KWH / 1000 GTKMs

Amount of Electricity (in KWH - Kilowatt hours) consumed per unit work (1000 GTKMs done

Engine: The amount of electricity (in KWH - Kilowatt-Hour) consumed per unit work done.

Over the last few years, Railways have been able to improve upon Specific Energy Consumption (SEC) by about 19% through various energy conservation initiatives.

For electric locomotives, there are mainly 3 modes of service for which GTKM earning is recorded to calculate SFC.

The figures of SECs (Approx), accordingly are:

For every 1000 GTKMs for 2023 Year

Mode of Service	SEC
EMU	40 KWH
Passenger	26 KWH
Goods	7 KWH

The figures represented by the electrical department is entirely rhetoric. Because for EMUs for record energy consumption the energy meter is not available with the locomotive and the figures are purely based on assumption.

For passenger and goods service locomotives, although an energy meter is available figures are manipulated.

For locomotives in shunting service GTKM earning can’t be recorded, hence it is not calculated.

Both SFC and SEC units are used in the Fuel budgeting of Diesel and Traction.

Factors that affect SFC

Weak Engine
Other factors P.Way, Signaling, Operating facilities
Vehicle Design
Driving techniques

Steps were taken to bring fuel efficiency

Arresting any leakages.
Application of Fuel Kit
High performance & high capacity turbo supercharger
Improved Air Cooler
Improved Piston and Piston ring
Use of Multigrade oil
Minimum inventory in RCDs - From 15 days to 5 days
Use of B-5 blended HSD - 5 % Bio Diesel
Fuel pattern - Cheaper RCDs are fuelling more to Diesel Locomotives to avoid fuelling at costlier RCDs
Withdrawn overaged WDMs Locomotives from mainline services
DPC - Driving Power Car of DEMU train - Conversion to dual-fuel i.e., Diesel + CNG
Auxiliary Power Unit - introduced in Diesel Locomotives - for automatic shutting down of Diesel Locomotives while standing idle.
CReDI - Common Rail electronic Direct Injection - Developed & Fitted in Diesel Locomotives
Developing alternative fuel systems like Traction, and Solar Power to reduce the consumption of Diesel.
IROAF - Indian Railways Organization of Alternate Fuels, Chennai - Developing the alternative fuel.
The performance of Loco Pilots are being monitored regularly.
Monitoring of idling of Locomotives has been started through REMMLOT - REmote Monitoring and Management of LOcomotive and Trains fitted in Locomotives.
All overaged Broad Guage Diesel Mixed Traffic Engines (WDM2) locomotives have been withdrawn from mainline service.
Retro-fitment of Microprocessor control system in diesel Locomotives has been executed to achieve fuel efficiency.
Miller cycle-based turbochargers and Variable Turbine Geometry (VTG) Turbochargers have been developed for ALCo locomotives to achieve fuel efficiency.

Solar Energy

Indian railways has planned for 1000 MW of solar power plants by 2020-21 with 500 MW at railway rooftops for non-traction use and 500 MW land-based for mostly in traction use.
The solar power from land-based plants shall be mostly used in train operations.
IROAF is implementing the provision of Solar Panels on the rooftop of coaches and Brake Vans of freight trains for taking up part of hotel load (electric lighting and fans load).
In Goods train, Solar Panels on a trial basis have been fitted on the rooftop of 50 Nos. Guard Brake Vans.
In passenger Trains, Solar panels on a trial basis have been fitted on the rooftop of 06 Nos. Trailer Coaches of Diesel Electric Multiple Units (DEMU).