Railway Accounts Department Examinations

Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts

Wednesday, February 14, 2024

Budgetary Terms - Terminology


Budget - Terms 


  1. Budget Allotments:

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". The allotments made out of funds voted by the Parliament are shown as "Voted" and those fixed by the President are shown as "Charged". 

  1. Budget Orders: 

The orders by means of which the allotments are made are called "Budget Orders".  

  1. Expenditure Order:

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 Order as distinct from “Budget Order”  

  1. Finance Bill:

When the Central Government proposes to introduce or amend taxes or the current tax structure (or continue with the same), the proposal is forwarded to the Parliament for approval in the form of Finance Bill. It can only be presented in Lok Sabha. 

  1. Excess Grants:

Actual expenditure incurred (out of the Consolidated Fund of India) in excess of a Grant voted by the Parliament will be regularized by the Parliament on the recommendation of PAC (Reasons to be fully explained by the spending authorities.) as a result of scrutiny of Appropriation Accounts of Railways and Audit Report of C&AG.  Presented after obtaining the recommendation of the President of India.Authority: Article 115 of the Constitution of India.  

  1. Residual Modifications: 

Residual Modification sanctioned by Competent authority (i.e., Railway Board, GM etc other than Parliament) i.e., Reappropriations, withdrawals, surrenders etc, It may be a plus or minus amount.  

  1. Annual Financial Statement:

As per 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". 



  1. 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. 

The Appropriation Bill as passed by the Parliament and assented to by the President forms the basis for budgetary allocation to the Railways. 

This Bill gives power to the Railways (as part of the Government) to withdraw funds to meet the expenditure during the financial year. The funds are withdrawn from the Consolidated Fund of India. 


  1. Charged Expenditure:  

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.  

In respect of Railways, the following expenditure is "charged" on the Consolidated Fund of  India-  

  1. The salary, allowances and pension payable to or in respect of the Comptroller and Auditor General of India;

  2. Any sums required to satisfy any judgement, decree or award of any Court or awards by     Arbitrators were made into rule of court ;

  3. Any other expenditure declared by the Constitution or by Parliament by law to be so charged.  


  1. Voted Expenditure: 

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".  


  1. Gross Working Expenses: 

Consists of Ordinary Working Expenses plus Appropriation to DRF plus Appropriation to Pension Fund. True expenses in an accounting period whether or not actually disbursed. 


  1. Gross Expenditure: 

Consists of Gross Working Expenses plus Suspense (DP - Demands Payable & MAR - Miscellaneous Advance Revenue).  Working Expenses actually disbursed during an accounting period. 

  1. Ordinary Working Expenses: 

Expenses booked under final heads (erstwhile Demands 03 to 12)


  1. Gross Earnings/Revenue: 

Consists of Coaching Revenue (less Refunds) plus Goods Revenue (less Refunds) plus Sundry Other Revenue. True or accrued earnings in an accounting period  whether or not actually realized.  

Complies Commercial Accounting.  


  1. Gross Receipts: 

Gross Revenue plus Suspense (Traffic & DR-Demands Recoverable).  Revenue/Earnings actually realised during an accounting  period.  

Complies Government Accounting. 

  1. Net Receipts/Surplus/Shortfall: 

Difference between Total Revenue Receipts minus Total Revenue Expenditure

  1. Demands for Grants: 

The proposals of the 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 being shown in the form of footnotes to Demands.  

  1.  Budget Cycle: 

The cycle is the life of a budget right from its preparation to its reviews. Broadly A. Preparation of Budget B. Execution of Budget C. Budgetary Reviews (1.RE/BE 2.FME). D. Appropriation Accounts.  However the detailed cycle is as follows: 

  1. Budget Estimates Preparation (by the Executives at the Grassroot level).

  2. Presentation to the Parliament (by the Finance Ministry)

  3. Passing of the Appropriation Bill by the Parliament.

  4. 1st Review: Revised Estimates stage - September (by taking first five months actuals)

  5. Presentation of Supplementary Demands for Grants to the Parliament.

  6. Passing of Supplementary Demands by the Parliament.

  7. Supplementary Grants / Revised Grants 

  8. 2nd & the Last Review: FME - Final Modification Estimates - January

  9. Final Grant by the Railway Administration 

  10. Appropriation Accounts at the end of the Financial Year (31st March)  & its scrutinisation by the PAC - Public Accounts Committee.

  11. Excess Grants (if any) after the expiry of Financial Year to regularize the excess expenditure. 

  1.  Civil Demands/Civil Grants: 

To enable the Ministry of Finance to incorporate the requirement of and /or information relating to the Ministry of Railways regarding staff advances(HBA, PC Advance etc) and other transactions such as Income Tax, Interest on Advances, Deposits etc  which form part of the General Budget.


  1.  New Service:   

Article 115 of Constitution of India and Para 370 of Indian Railways Finance Code   -  "The expenditure arising out of a new policy decision, not brought to the notice of Parliament earlier (i.e., through Railway Budget), including a new activity or a new form of investment."

  1. New Instrument of Service:  

It is a slight variation of New Service.  It refers to relatively large expenditure arising out of important expansion of an existing activity.

To be continued…………

Thursday, February 1, 2024

Railway Budget 2024-25 Analysis


FY 2024-25 Railway Budget - Analysis 

By Nageswara Rao 9492432160

Source: Click for Railway Budget 2024-25 at a glance




(Rs. in Crores)





(Rs. in Crores)



Coaching Revenue


32 %


Ordinary Working Expenses


75 %


Goods Revenue


64 %


Appropriation to Pension Fund


24 %


Sundry Revenue


  4 %


Appropriation to DRF


1 %


Gross Revenue (1+2+3)


100 %


Total Working Expenses (1+2+3)


100 %






Minus 65


Gross Traffic Receipts (4+5)



Gross Expenditure (4+5)



Misc Receipts



Misc. Expenditure



Total Revenue Receipts (6+7)



Total Revenue Expenditure


Operating Ratio:  = Total Working Expenses / Gross Revenue x 100

Operating Ratio = 273065 / 278000 x 100 = 98.22%

Net Revenue = Total Revenue Receipts minus Total Revenue Expenditure 

Net Revenue =  278500 minus 275700 = 2800

Appropriation of Net Revenue/ Net Receipts / Surplus - Rs. 2800 Crores


Amount  (Rs. in Crores)

Development Fund




Net Revenue /Net Receipts 


Appropriations to Capital Fund, RSF - Railway Safety Fund, Debt Service Fund  - NIL 

Highest OR:   Kolkata Metro - 232.2%,  NCR - 206.4%

Lowest OR: ECoR - 53.6%, SECR - 59.9%