Reappropriation / Redistribution

Re-appropriation / Redistribution Rules

 

               Definition:   

·        The transfer of funds,

·        Originally assigned for expenditure on a specific object

·        To supplement the funds sanctioned for other objects. 

 

·        The new word for Reappropriation is Redistribution

 

In Simple:

 

Father gave money Rs. 1000 to his son to go to a Picnic.  Bifurcation of Rs. 1000 is: 

• Rs. 300 for transport, 
• Rs. 300 for Food,
• Rs. 300 for accommodation, and
• Rs. 100 for miscellaneous.

 

However, the son is permitted to re-appropriate the amount as per his needs (within the bifurcated figures)  i.e., From Food to Miscellaneous.  But he can’t reappropriate beyond the permissible amount and requirements. 

 

Object: 

·        The whole object is to ensure that, as far as possible,

·        funds that are not required are withdrawn from disbursing officers as soon as it is definitely known that they are not required,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.

Salient Features:

·        Codal Provisions:  375F to 381F

·        Important administrative tool in the hands of the executive in budget execution, without going to Parliament on trivial issues.

·        Prior Finance Concurrence is required.

·        Annexure i of Appropriation Accounts – deal with the irregular Re-appropriations

·        Should not be randomly / unsystematically

·        The administration should review the position as a whole at intervals and carry out necessary re-appropriations. 

·        The whole object is to ensure that, as far as possible,

• funds that are not required are withdrawn from disbursing officers as soon as it is definitely known that they are not required, 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.

• Save for Budgetary review periods, re-appropriations are open throughout the year. 

• Sanction Order of re-appropriations should be generated from Budget VPN (Virtual Private Network) or VeRBS – VPN enabled Rail Budget System through the reappropriation Module only, so that the changed funds' position gets reflected in the system.

• PAC and C&AG are critical of large-scale re-appropriations and frequent re-appropriations as they tend to undermine Parliamentary Authority over Railway finances. Hence it needs to be justified with reasons.

• Funds can not be reappropriated to a work not having administrative approval and technical sanction of competent authority.

• Amount reappropriated to any work shall not exceed the sanctioned cost of that work. 

•  Re-appropriations cannot be done against the outlay and during the currency of the 'Vote on Account' allotment.

• No reappropriations may be done after the issue of RE/RG. Urgent requirements, if any, may be projected at the supplementary stage in February and/or Final Estimates in March.

• Any number of Re-appropriations are permitted, but no re-appropriation can be done to restore funds withdrawn during the year.  

• These relaxations vary from year to year and are communicated through Spending Limit orders.    

• When orders are issued by the Railway Board authorizing 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 re-appropriations or in distributing the sanctioned allotment over the various sub-heads.

Railway Board - Re-appropriation Powers
Allowed			Not allowed
From	To		From	To
One Sub Major Head (erstwhile Demands)	Another Sub Major Head  (erstwhile Demands)		Within Grant (Revenue )	Within Grant (Capital)
One Plan Head	Another Plan Head		Within Grant (Capital)	Within Grant (Revenue )
One item under Bulk orders of Plan Head 21 - Rolling Stock	To another item under Bulk orders of Plan Head 21 - Rolling Stock		Voted	Charged
National Projects or Projects of National importance			Charged	Voted
Works involve Material Modification of Rs. 2.5 Crores and above during the current financial year			One Source of Finance (i.e. between Capital, Railway funds, Railway Safety Funds, Rashtriya Rail Sanraksha Kosh, EBR(IF) , EBR(IRFCBonds) etc.)	Another Source of Finance (i.e. between Capital, Railway funds, Railway Safety Funds, Rashtriya Rail Sanraksha Kosh, EBR(IF) , EBR(IRFCBonds) etc.)
·        Under EBR Works (except EBR (IF)			One Civil Grant (SBF, HBA, PC)	Another Civil Grant (SBF, HBA, PC)
Under works executed by RVNL			One Major Head	Another Major Head
			After 31st March
			One Railway Fund to another Railway Fund ( like DRF, DF, SF etc)

Zonal Railways - Re-appropriation Powers
Allowed			Not allowed
From	To		From	To
Redistribute within same primary unit under same Sub Major Head (erstwhile Demand)			Revenue	Capital
·        From One Itemized Pink Book work in Same Plan Head, Same Source finance subject to residual grant being not less than Rs.One Lakh	·        To another Itemized Pink Book work in Same Plan Head, Same Source of Finance subject to residual grant being not less than Rs. .   One Lakhs.		Capital	Revenue
·        From One work of LAW Book item sanctioned under Pink Book costing Rs.2.5 Crores each (Lumpsum works)	·        To another work of LAW Book item sanctioned under Pink Book costing Rs.2.5 Crores each (Lumpsum works)		Voted	Charged
On the portion of work constituting MM - Material Modification which are below Rs.2.5 Crores, if MM pertains to Current year			Charged	Voted
			One Source of Finance	Another Source of Finance
			One Civil Grant (SBF, HBA, PC, DF, DRF etc)	Another Civil Grant (SBF, HBA, PC, DF, DRF etc)
			One Plan Head	Another Plan Head
			One item under Bulk orders of Plan Head 21 - Rolling Stock	To another item under Bulk orders of Plan Head 21 - Rolling Stock
			National Projects or Projects of National importance
			Works involve Material Modification of Rs. 2.5 Crores and above during the current financial year
			To / From and among EBR Works
			To/From and among works executed by RVNL
			After 31st March

Zonal Railways

·        All proposals for Re-Appropriation of funds which are beyond the GM's Powers shall be submitted to the Railway Board sufficiently early to admit of action being taken before the close of the year. 

·        Revenue  - DRM & PHOD are competent 

·        Works – GM only is competent. 

Annexures (Total 10) to Appropriation Accounts

A.              Unsanctioned Expenditure

B.              Under charges detected by Audit and Railways

C.              Remission & abandonment of claims

D.              Expenditure on Important Open line Works & New Construction

E.               Expenditure on Strategic Lines

F.               Credits & Recoveries ( Estimated & Actual)

H.    Losses & Ex gratia payments (Rs. 5 Lakhs and above)

I.            irregular Reappropriations

J.                Important Misclassifications

K.              Defects in Budgeting  (In fact, there is no alphabet K for this annexure. )

 

Key Points: 

1.    Reappropriation Rules - Chapter 3 of Finance Code (Para 375 to Para 381) 

2.    Annexure i of Appropriation Accounts – deals with the irregular Re-appropriations 

 

3.              VPN stands for  Virtual Private Network 

 

4.              VeRBS stands for  VPN enabled Rail Budget System 

 

5.              Railway Board and Zonal Railways have No Powers for the following reappropriations. 

A.             Voted to Charged or Vice Versa  

B.   One Major Head to Another Major Head 

C.   Revenue to Capital or Vice Versa 

 

D.   One Source of Finance to Another Source of Finance 

 

E.   One Railway Fund to Another Railway Fund 

 

F.    One Civil Grant to Another Civil Grant 

 

G.  After 31st March 

MCQ - Reappropriation Rules

1.    Which one is not correct in respect of Re-appropriation Rules ?

A.              Prior Finance Concurrence is required. 

B.              Sanction Order of re-appropriations should be generated from Budget VPN (Virtual Private Network) or VeRBS – VPN enabled Rail Budget System through reappropriation Module only,

C.              Annexure J of Appropriation Accounts deals with the irregular Re-appropriations

D.              Reappropriations are not allowed after 31st March.   

2.  VeRBS stands for ______________

A.              VPN enabled Rail Budget System

B.              Virtual engineering Rail Budget System

C.              VPN enabled Rail Budget Source

D.              Virtual engineering Rail Budget Source

3. VPN stands for ________________ 

A.              Value Private Network

B.              Virtual Program Network

C.              Virtual Provisional Network

D.              Virtual Private Network

4. Which Reappropriation is permitted by Railway Board

A.              One Source of Finance to Another Source of Finance

B.              One Sub Major Head to Another Sub Major Head under Major Head 3002

C.              Revenue to Capital or Vice Versa

D.              Voted to Charged or Vice Versa 

5. Zonal Railways have powers to Reappropriate On portion of work constituting MM - Material Modification which are up to  _________, if MM pertains to Current year 

A.             Rs. 5 Crores 

B.             Rs. 1 Crore 

C.             Rs. 2.5 Crore 

D.             None of these

Answers: 

1.    C 

2.    A

3.    D

4.    B {Because Major Head 3002 is part of Single Demand No.85 (for FY 2023-24).  However, Zonal Railways have no power to reappropriate among SMH - Sub Major Heads } 

5.    C

 

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