Appropriation Accounts

Appropriation Accounts

         Source: 4th Chapter of Finance Code

·         The statements which are presented to the Parliament (through PAC) ,

·         comparing the amount of actual expenditure with the amount of grants voted by the Parliament and Appropriations sanctioned by the President of India are called Appropriation Accounts

Grants	Voted	As voted by Parliament
Appropriations	Charged	As Sanctioned by the President of India

 

Object:

·         Budget is an instrument of Parliamentary financial control and an important management tool.

·         Parliamentary control not only secured by the fact that all the voted expenditure must receive Parliament’s prior approval, but also by system of reporting back to it (Parliament) through PAC

Prepared & Signed by:

Railway Board level	CRB and Member/Finance
Zonal Railway level	GM and PFA

 

Note: This cannot be delegated to any other authority.

·         Due Date: June/July

·         Submitted to Dy.C&AG/Railways, who has been entrusted by the C&AG with the duty of reporting on these Appropriation Accounts of Railways.

·         2 weeks time for Audit for vetting the Appropriation Accounts.

·         Presented to Parliament during Winter session of the Same Calendar year to which the accounts pertain.  (Example: 2019-20 Appropriation A/cs due 2020 Jan to December)

·         Reconciliation certificate: Certificate should be invariably be given under each SMH that actual have been reconciled with the figures in March Final Account Current.

 

·         Grant 83  - Ministry of Railways  (for 2020-21)  - Two parts i.e., Revenue & Capital

 

 

Form

                            Grant No. 83 (for the year 2020-21)-SMH – 01 – General Superintedence & Servces

(Rs. in thousands)

Minor Head	Final Grant	Actual Exp.	Excess/Saving With ref to FG	Excess/Saving With ref to (O +S)
200 Financial Management   ‘O’  - 80 ‘S”  - 30 ‘R’  -  (-) 10	100	85	(-) 15	(-) 25

 

‘O’ stands for Original Grant

‘S’ stands for Supplementary Grant

‘R’ stands for Residual Modification sanctioned by Competent authority (i.e., Railway Board, GM etc other than Parliament )  i.e., Reappropriations, withdrawals, surrenders etc,

·         Due to merger of Railway Budget with General Budget, Single Grant Account (82 for 2019-20, 83 for 2020-21) shall prepare.

·         Appropriation Accounts – Rs. In thousands

·         Annexures  - Rs in units

Total enclosures in Appropriation Accounts are 44

Description	No of enclosures
Grants/SMH	16
Annexures	10
Statements	15
Annexure G (Final Accounts)	3
Grand Total	44

 

Grants – Total 16 . They are as follows

 

1. MH 3001 (erstwhile Demand No. 1)

2. MH 3001 (erstwhile Demand No. 2)

3 to 14. Erstwhile Demands 3 to  14 (SMH 1 to 12 of MH 3002)

15. MH 5002 (erstwhile Demand No. 16)

16. Civil Grants (Loans & Advances, Pre partition payments, Interest on Debt, Income Tax, Deposits)

 

Annexures (Total 10)

Statements of

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. )

 

Statements: (Total 15)

1.       Statement showing Distributable Expenditure and Receipts

2.       Statement showing changes in Forms & Classifications

3.       Operating Ratio

4.       Statement showing credits to Capital for Retired Assets

5.       Statement of annual Voted and Charged expenditure

6.       DRF

7.       DF

8.       Capital Fund

9.       RSF & Debt Service Fund

10.   Pension Fund

11.   Statement of O/s balances under Suspense

12.   Stores A/c

13.   SA A/c

14.   P&L A/c of Catering Dept

15.   Statement of PH wise, Source wise, Works Expenditure (Gross, Credit & Net) and Voted & Charged. (New one - added in 2019-20)

Annexure G - Final Accounts - (complying the Commercial Accounts like Companies)

I - Capital Statement (Block A/c)  -  Part I - Commercial ,  Part II - Strategic

II - P&L A/c or Manufacturing A/c (Commercial & Strategic)

III - Balance Sheet (Commercial & Strategic)

 

 

Important change in Annexure J

(after merger of Railway Budget with General Budget from 2017-18 onwards)

Type	Examples	Dealt at
Misclassifications	Voted to Charged or vice versa Capital to Revenue or vice versa	Railway Board.  Unresolved will become part of Audit Report
Other Mistakes	One SMH to another SMH	Zonal Railway only (Need not send to Railway Board)

 

Explanations for Variations  - Revenue (from 2019-20 onwards – as per 17^th Loksabha recommendations)

Explanations for variations - Revenue

Excesses/Savings	5 Crores & above (irrespective of Percentages	Original Grant
Excesses/Savings	2.5 Crores or 10 % whichever is higher	Original Grant
Savings	1 Crore or 10% whichever is higher	Supplementary Grant
Excesses	Rs. 25 Lakhs and above	Sub Heads

 

·         Minor variations – should be explained. Because at IR level, these may be cumulative and required as such

·         Explanations should not be vague such as due to over estimates or covered by re appropriation etc.  It should be clear, precise and complete description.

Explanations for variations - Capital (for the following Plan Heads only)

1100	New Lines	All works
1400	Gauge Conversion	All works
1500	Doubling	All works
3500	RE	All works

 

3100	Track Renewals	Works of Rs. 20 Crores & above
3200	Bridge Works	Works of Rs. 20 Crores & above
3300	S&T	Works of Rs. 20 Crores & above

 

 

1.       Entire Supplementary Grant – if unutilised

2.       Entire Original  and Supplementary Grant – if unutilised

3.       10 % of Supplementary Grant or Rs. 1 Crore whichever is higher

 

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New Service / New Instrument of Service

New Service / New Instrument of Service

 

●           In simple "A service for which there is no provision in the Budget of the year concerned is called NEW SERVICE."

 

●           Definition: 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."

 

●           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.

 

●           The term "New Service/New Instrument of Service" is governed by the case law decided by the Public Accounts Committee (PAC) from time to time.

 

●           As per PAC recommendations,  presently new works estimated to cost more than Rs. 2.5 Crores each are treated as “New Service/New instrument of Service’.

 

●           Normally a New Service/New Instrument of Service  should not be undertaken and no expenditure should be incurred on it till the funds for the same are approved by Government and sanctioned by Parliament (through Railway Budget).

 

●      However, in case it becomes Inescapable to incur any expenditure on any New Service/New Instrument of Service  before the allotment of funds by the Parliament, an advance is taken from the CONTINGENCY FUND OF INDIA (placed at disposal of Financial Commissioner for Railways) to meet such expenditure.

 

●           Para 382 of I.R.Finance Code Vol I - Applications for advances  (from Contingency Fund) required by the Railways shall be made to the Financial Commissioner for Railways giving the following particulars: -

                    (i) Brief particulars of the additional expenditure involved;

 (ii) The circumstances in which provision could not be included in the Budget;

 (iii) Why it's postponement is not possible;

 (iv) The amount required to be advanced from the fund with full cost of the proposal for the year or part of the year, as the case may be; and

 (v) The grant or appropriation under which supplementary provision will eventually have to be obtained.

       A list of works falling under this category is appended with the "Demands for Grants".

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Books & Budget - Important questions

Books & Budget - IMPORTANT. QUESTIONS -Short Notes - 5 marks

Notes:

A.    (W) means With Books and (WO) means Without Books.

B.    Wherever marks not indicated, they are asked for 5 marks.

C.   My advice is to read and cover entire syllabus irrespective of Important or Not Important.  Subsequently put more preference for important ones because they are repeatedly asked in previous examinations as well as for importance they associated with in working of Indian Railways.

                                                                                    ***

1.    Operating Ratio  -1985 (WO),1988 (WO)-20 marks,1990 (WO), 1991 (WO)-20 marks, 1992 (WO), 1994 (WO),  2012 (W)   Click for OP theory and Practicals

2.     Development Fund (DF) - 2012 (W) 

3.     Proportionate Budget Allotment (or Budget proportions) - 1989 (W), 2012 (W)

4.    Public Accounts Committee (PAC) - 1989 (WO), 2012 (WO)   Click for PAC

5.    Depreciation Reserve Fund (DRF) - 2012 (WO) 

6.    Final Modification Statement - 1987 (WO), 1988 (W), 1991 (WO), 1992(WO), 1993(WO),

                                                1995(WO), 2012 (WO)

7.    Vote on Account - 1991 (WO), 1994 (WO), 1995 (WO) Click for article on VOA

8.    Public Account of India - 1991 (WO), 1995 (WO) 

9.    Contingency Fund of India - 1986 (WO), 1987 (W), 1988 (WO), 1990 (WO), 1991 (WO),

                                            1995 (W), 1996(W), 1997 (WO) 

10.  Post Audit of Paid Vouchers  - 1985 (WO) 1987 (W)-20 marks, 1988 (W)& 1991(W) - 10 marks

11.  New Service/New Instrument of Service - 1985 (WO), 1988 (WO), 1989 (WO)  Click for New Service article

12.  Reserve Bank Suspense - 1987(W), 1990(W), 1992(W)  Click for Reserve Bank Suspense

13.  Re-Appropriation - 1988(W)-20marks,1993(W), 1994 (WO)-10marks, 1996 (WO), 2010 (W)

14.  Mis Classification /Annexure J - 1990 (W), 1993 (W), 1994 (W) Click for Misclassification

15.  Civil Demands/Civil Grants - 1986 (WO), 1989 (WO), 1994 (W)

16.  Capital Fund -1994 (W), 1995 (W), 1997 (WO)  Click for Capital Fund

17.  TWFA - Transfers Without Financial Adjustments - 1990 (WO), 1994 (W), 1995 (WO), 1997 (WO)  Click for article onTWFA

18.  IRFC -  Indian Railways Finance Corporation  - 1990 (W), 1992 (W)-10 marks,

                                                                           1995(W)-20 marks, 2004 (W) Click for IRFC

19.  RCC - Railway Convention Committee - 1987 (W), 1988 (WO), 1990 (W), 1992 (WO), 1995 (WO)  Click for RCC

20.  Exchequer Control - 1985 (WO)-20 marks, 1986 (WO)-20 marks, 1988 (WO)-20 marks,

                                1990 (W)-10 marks, 1991 (W), 1993 (WO), 1994 (WO),

                                1995 (WO)-20 marks, 1996 (W) Click for Exchequer Control

21.E-Recon or Transfer Transactions   click for ERecon

22. Sources of Finance click for articles on various Funds

23. Railway Safety Fund Click for article on RSF

24. RRSK Click for RRSK

25. Debt Service Fund or Railway Liability Reserve Fund Click for article on Debt Service Fund

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