GENERAL EXPENDITURE
Surveys
Estimates: A. Check Of Estimates
Tenders
Contracts And Agreements
Measurement Book
Contractor’s Ledger And Check Of Contractor’s Bills
Works Registers And Revenue Allocation Registers
Material At Site Accounts
Deposit Works
Sidings – Private And Assisted
Maintenance Of Land And Buildings
Completion Report
Objectionable Item Register
Labour Pay Sheets
Initial Records At XEN’s Office
Duties Of Works Accountant
Revised Classification
Various Funds – Capital, OLWR, DRF, DF
Parliamentary Control Over Expenditure

GENERAL EXPENDITURE SHORT NOTES
Feasibility Report
Techno Economic Survey
Departmental Expenditure
Divisional Schedule Of Rates
Financial Propriety
Late And Delayed Tender
Tender Committee
Terminal Tax
Earnest Money Deposit And Security Deposit
Deposit Miscellaneous Receipts / Expenditure
Muster Sheet
Completion Statement
13. Exchequer Control
14. Final Financial Review
15. August Review
16. Revised Estimate
17. Final Modification
18. Final Grant
19. Demands For Grants
20. Budget Order
21. Works Programme
22. Pink Book
23. Ballast
24. Buffer Stock
FEASIBILITY REPORT
TECHNO – ECONOMIC STUDY
Since the Planning Commission monitors all infrastructural and developmental works, prior to incurring the huge capital expenditure, a feasibility report or a techno –economic study is conducted to gauge the monetary value of the project. Plan Heads are used to indicate the source of funds and these are common to all ministries.

RECONNAISSANCE
This is a rough and rapid survey without any technical instrument. The purpose is to assess the
PRELIMINARY
Consists of a detailed instrumental examination of the route/s selected as a result of reconnaissance survey in order to obtain a close estimate of the probable cost of the projected railway. Based on this survey, the decision whether the line is taken up of not is usually taken in conjunction with Traffic survey. In this survey no sophisticated survey equipments are used.
TRAFFIC
This is detailed survey of the traffic conditions and prospects of an area with the object of determining the most promising (economic) route for the rly line in the area, the probable traffic. Based on this survey only project is determined
FINAL LOCATION
This is a more sophisticated and detailed technical survey and is normally conducted after once the justification of the project is accepted, based on the Preliminary Survey. The alignment of the line is finally selected is fully staked on the ground with a “theodolite” or “ tachometer” and the report with detailed plans and sections prepared only after the final location survey has been completed and the report received by the Rly Bd , sanction for the project is accorded.

Estimate is an assessment of quantum of labour, material and other services required to complete a work and it is expressed in monetary values.
ABSTRACT ESTIMATE - 702 E, DETAILED ESTIMATE- 707 E, SUPPLEMETNARY ESTIMATE - 707 E, REVISED ESTIMATE - 708 E, PROJECT ABSTRACT ESTIMATE - 709 E, PROJECT DETAILED ESTIMATE -710 E, COMPLETION ESTIMATE - 713 E

ABSTRACT ESTIMATE is prepared in order to enable the authority competent to
give administrative approval to the expenses to judge the necessity, utility and Financial prospects and to enable the authority to gauge the magnitude and Nature of the work contemplated. These estimates avoid the delay and expenses Of preparing estimates in detail at a stage when the general desirability of the work Has not been decided. Para 702 E

DETAILED ESTIMATE is prepared to secure technical sanction to the work After the administrative approval is accorded. These estimates are prepared In sufficient details to enable the competent authority to ensure that the cost Indicated in the abstract estimate in not exceeded. The work is taken up only After the sanction of this estimate. Para 707 E
PROJECT ABSTRACT ESTIMATE is prepared after the Final Location is completed. This is submitted to Rly Bd showing the abstract cost of the project under Different sub heads of allocation showing further the unit cost and rate of Expenses per kilo meter of the line for the whole line and sections of the line. This is accompanied by i. an abstract estimate of junction arrangements
ii. A narrative report of explaining the proposed expenditure under capital heads
like workshop, stores, buildings, plant & machinery etc iii. Detailed estimate
for the civil construction.
This estimate is submitted for purposes of Parliamentary and Administrative Approval and necessary funds for taking up the work are allotted to the Rlys Based on these estimates. Para 702 E

PROJECT DETAILED ESTIMATE is detailed working estimates of all works Included in the project and is prepared after a careful examination of all Various details of construction involved in the project. Once this estimate is Prepared preparation of further working estimates should not arise except Some supplementary or revised estimate becomes necessary. This is prepared and submitted to the competent technical authority for his sanction. Details of junction arrangements, main line and branch line estimates, Divisions of project including estimates for the alternative alignmentss and For the length with it would supercede if adopted to be furnished. It should be Split geographically based on the sections likely to be opened for traffic in stages

SUPPLEMENTARY ESTIMATE is prepared for any item of work which ought to have been included in the first instance in an estimate already sanctioned but has not been included, which it is found later should be considered as being a part of or a phase of an estimate already prepared and sanctioned, if it cannot be met out of contingencies. Such estimates should be prepared in the same form and the same degree of detail as the main detailed estimate and for all purposes be treated as part of the detailed estimate.
REVISED ESTIMATE As soon as it becomes apparent that the expenditure on work or a project is likely to exceed the amount provided for in the detailed estimates or construction estimate ( including supplementary if any) a Revised Estimate should be prepared and submitted to competent authority. It should unless otherwise ordered by the sanctioning authority, be prepared in the same form in the same degree of detail as the original estimate. It should be accompanied by a comparative statement showing the excess or savings under each sub head a/c against the latest sanction.

COMPLETION ESTIMATE is prepared in supercession of construction estimate This estimate shows in a tabular form the following particulars: 1. amount of sanctioned estimate 2. Actual expenditure 3.commitmebts on that day 4. Anticipated further outlay 5. Total estimated cost 6. Diff between sanctioned estimate and estimate cost.

Check of estimates:
Propriety of expenditure
Incidence and classification of charges
Existence of budget provisions
Freedom from errors and omissions
Competency of sanction
As a Financial Advisor, it is the duty of AO to see
The expenditure proposed is to be charged to the railway funds is properly and legitimately chargeable
That proper financial justification is forthcoming in all works requiring financial justification,
That in the case of estimates for the staff quarters and other rent returning buildings the anticipated yield of rent as shown in the Rent Statement will not have the effect of reducing the return on the cost of each class of quarters to less than the dividend rate per annum.
Incidence and classification of charges should be verified in an estimate according to rules of classification of expenditure as provided in the Revised Classification ( FII). In the verification certificate AO should indicate the correct allocation and the same is verified.
Existence of budget provision. The provision in the budget for the proposed work should be verified with reference to the sanctioned allotment for the year. Errors and omissions should be got vetted by the executives where needed a check note indicating the errors and omissions should be enclosed to the estimate at the time of verification.
Competency of sanction The powers vested with the sanctioning authority should be verified with reference to the extent Schedule of Powers and a clear indication regarding the authority competent to sanction the estimate should be given in the estimate. A certificate of accounts verification I the following form is to be appended to “incidence and allocation verified subject to the check note attached. This requires the sanction of …………………….”

Minor points:
1 the particulars of work should be given in sufficient detail and proper distribution should be made between cash and stores
2 the allocation of each item is given and an abstraction of allocation is made
3 that all incidental expenditure that can be foreseen has been provided for in the estimate
4 that in the case of renewal, replacement or dismantlement, the credit for the released materials has been provided (CRRM)
5 that in the case of a work to be done for other Govt depts., or private bodies provision has been made for necessary departmental charges
6 that in the case of estimates for staff quarters and other rent returning buildings a Rent statement is enclosed



COMPLETION REPORT:
C R of a work or project is prepared by the executive dept in the prescribed format with a view to comparing the actual expenditure on the works, sub work wise with the latest sanctioned estimate/ completion estimate. Where ever more one dept has executed the work, part CR can also be prepared in respect of their sub worksfor which separate sub estimates are available. Where ever the expenditure of the work exceeds 10 % with reference to the estimated cost, under each cub work explanation for the same should be given. Similarly, for any savings exceeding 20 % an explanation is given.
Before the CR is drawn, the executive should ensure that all charges and receipts for the work have been fully booked to the work account. In order to help the executives in this direction, the work registers are viewed in the accounts office and where ever no bookings occur continuously for more than 3 months, such works are reported to the executive concerned thru” work suspended statement”. Based on the statement, the concerned executives should take speedy action in collecting further charges and receipts against the work so that CR may be drawn.
In case of works for which no revised estimates are prepared to cover the variations in the cost, the same shall be also regularized under competent sanction through CR. The CR prepared with the help of the postings in the works registers and they are submitted to the AO where the following points are verified.
that the CR has been prepared in the prescribed format
that the entries made therein agree with those mentioned in the concerned works registers
that the credit for released material as provide for in the estimate has been adjusted against the work concerned
that the materials originally charged to the work but not used u,p has been returned to stores or transferred elsewhere duly affording necessary credits to ht work
that the posting of all final bills of supply or contract relating to the work have nee made in the works register
that satisfactory explanation are given for excesses of savings
that necessary certificate that “addenda and corrigenda” to the list of building have been issued to given in the CR.
In case of deposit works a certificate that all charges have been fully booked should be entered in the register of deposit works or sidings. After checking the CR as above the same are certified for sanction of the competent authority duly indicating the authority in terms of Schedule of Powers. The CR is then suited to the competent authority for sanction and on receipt of the sanctioned CR the same is noted in the separate Register of CRs Sanctioned in the estimates register against the concerned work also in the works register.
Even in the case of work where work are not finished but there is no reasonable prospect of completing the works in the near future, the Accounts of the work should be closed as in the case of completed works and CR drawn and submitted to the competent authority who has accorded the administrative approval to the work duly certified by accounts.

Form E. 1473
WORKS REGISTER
Name of work ...............
Authority ................…….
Capital........... .Rs. case……………Rs…………. Budget allotment for the year
Depreciation Fund.........Rs. Stores...... Rs. Original Estimate No…………..
Development Fund .......... Rs. Total .....Rs. Revised Estimate No....
Accident Compensation
Passenger Amenities Fund ................... ......
Open Line Works Revenue ................
Revenue ................. Rs.
Date of Commencement ..............
Date of Completion ..............

Date
No. of voucher
Particulars
Items of Estimate Head of Accounts
Amount
Amount
Amount
Amount
Capital
DRF
Revenue
Developm-ent Fund
1
2
3
4
5
6
7
8
9
10
11
1474. This register should show the amount of estimate sanctioned, the budget allotment and details of expenditure on each work by heads of accounts and in addition under sub-heads of estimates in case of track renewal works estimated to cost Rs. 3 lakhs and over and Rs. 1 lakh and over In the case of other works. In this register sub-heads of estimate estimated to cost less than Rs. 10,000 need not be separately detailed, hut may be grouped together as may be found 'the convenient. The Register may be arranged by detailed heads of classification (for works falling under the demand relating to creation and replacement of assets) separate folios being set apart for each work. At the close of every month the Register of Works should be totalled up and the monthly, yearly and 'up-to-date' totals for each work struck. The Register of Works should be preserved for a period of 10 years.
1475. In posting the Register of Works in the case of works, the accounts of which are kept by sub-heads, the last column relating to each work will always show the 'total charges', the last column but one will show value of materials received in advance of payment 'to contractors', the last column but two will show the value of the 'materials-at-site' and the last column but three will Show ‘advance payment for supply of materials'. In the Ease of works, the accounts of which are not kept by sub-heads (form E. 1479), the value of 'Materials-at-site' need not be separately shown but the value of materials received in advance of payment to contractor and advance payment for supply of materials, if any should be shown in all cases.

Form E. 1473
WORKS REGISTER
Name of work ...............
Authority ................…….
Capital........... .Rs. case……………Rs…………. Budget allotment for the year
Depreciation Fund.........Rs. Stores...... Rs. Original Estimate No…………..
Development Fund .......... Rs. Total .....Rs. Revised Estimate No....
Accident Compensation
Passenger Amenities Fund ................... ......
Open Line Works Revenue ................
Revenue ................. Rs.
Date of Commencement ..............
Date of Completion ..............

Date
No. of voucher
Particulars
Items of Estimate Head of Accounts
Amount
Amount
Amount
Amount
Capital
DRF
Revenue
Developm-ent Fund
1
2
3
4
5
6
7
8
9
10
11
1474. This register should show the amount of estimate sanctioned, the budget allotment and details of expenditure on each work by heads of accounts and in addition under sub-heads of estimates in case of track renewal works estimated to cost Rs. 3 lakhs and over and Rs. 1 lakh and over In the case of other works. In this register sub-heads of estimate estimated to cost less than Rs. 10,000 need not be separately detailed, hut may be grouped together as may be found 'the convenient. The Register may be arranged by detailed heads of classification (for works falling under the demand relating to creation and replacement of assets) separate folios being set apart for each work. At the close of every month the Register of Works should be totalled up and the monthly, yearly and 'up-to-date' totals for each work struck. The Register of Works should be preserved for a period of 10 years.
1475. In posting the Register of Works in the case of works, the accounts of which are kept by sub-heads, the last column relating to each work will always show the 'total charges', the last column but one will show value of materials received in advance of payment 'to contractors', the last column but two will show the value of the 'materials-at-site' and the last column but three will Show ‘advance payment for supply of materials'. In the Ease of works, the accounts of which are not kept by sub-heads (form E. 1479), the value of 'Materials-at-site' need not be separately shown but the value of materials received in advance of payment to contractor and advance payment for supply of materials, if any should be shown in all cases.
1476. Value of materials received in advance of payment to contractors.--When the materials are received before payments have been made, such transactions should be credited to a separate suspense head "Value of materials received in advance of payment to contractors" in the Register of Works under the head of account that will record a major part of the cost of work, the credit under the suspense head should be cleared as anti when payment is made.
A Subsidiary Register for all purchase orders for such items should be maintained work wise by the Accounts Office and entries on credit side should be made under the initials of sub-head/Section Officer (Accounts) from the Receipt Note Part III received duly evaluated from Executive Officers concerned in terms of para 739-S. Receipt Notes should simultaneously be posted in Works Registers by debit to 'materials-at-site account/final head' and contra credit to 'value of materials received in advance of payment to contractors' referred to above. All payments chargeable to this head should be made after being posted on the debit side in the subsidiary register under the initials of the Controlling Officer. The balances in the subsidiary register should be reconciled monthly with those in the Works Registers.
Thus, for stares purchased for specific works the transactions will not find a place in the Stores budget under this procedure. Arrangements should, however, be made to ensure that the total figures of purchases during a year for specific works which do not pass through Stores Account are available with the Railways for statistical purposes etc.
1476. Value of materials received in advance of payment to contractors.--When the materials are received before payments have been made, such transactions should be credited to a separate suspense head "Value of materials received in advance of payment to contractors" in the Register of Works under the head of account that will record a major part of the cost of work, the credit under the suspense head should be cleared as anti when payment is made.
A Subsidiary Register for all purchase orders for such items should be maintained work wise by the Accounts Office and entries on credit side should be made under the initials of sub-head/Section Officer (Accounts) from the Receipt Note Part III received duly evaluated from Executive Officers concerned in terms of para 739-S. Receipt Notes should simultaneously be posted in Works Registers by debit to 'materials-at-site account/final head' and contra credit to 'value of materials received in advance of payment to contractors' referred to above. All payments chargeable to this head should be made after being posted on the debit side in the subsidiary register under the initials of the Controlling Officer. The balances in the subsidiary register should be reconciled monthly with those in the Works Registers.
Thus, for stares purchased for specific works the transactions will not find a place in the Stores budget under this procedure. Arrangements should, however, be made to ensure that the total figures of purchases during a year for specific works which do not pass through Stores Account are available with the Railways for statistical purposes etc.
1517. Use of Works Register.--The Works Register (refer to para 1472) maintained in each division serve as an important management tool in providing information which enables a comparison of the expenditure incurred against a work with the Divisions made in the estimate. The executive officer should examine the information recorded in the Works Registers monthly or at more frequent intervals and watch the progress of expenditure on each work so that any tendency towards excess over sanctioned estimate may be investigated and curbed or fresh administrative and technical sanction obtained in time to cover the anticipated excess.
1518. Progress Report-cum-Financial Review.--For effective financial control of works a system which will monitor the relation between achievement and expenditure is essential. Financial Reviews assist in such a monitoring process and also serves as a management reporting system linking the progress of work with the expenditure incurred. Financial Review provides a means of assessing probable variations from sanctioned estimate at the earliest possible date.
1519. Preparation of Progress Report-cum-financial Review.--Financial Reviews are to be prepared half yearly in the proforma given below (Form E-1519) and should include (a) new construction conversions, doublings. (b) open line works costing Rs. 50 lakhs (gross) and over, and (c) track renewal works costing Rs. 50 lakhs (gross) and over.
1517. Use of Works Register.--The Works Register (refer to para 1472) maintained in each division serve as an important management tool in providing information which enables a comparison of the expenditure incurred against a work with the Divisions made in the estimate. The executive officer should examine the information recorded in the Works Registers monthly or at more frequent intervals and watch the progress of expenditure on each work so that any tendency towards excess over sanctioned estimate may be investigated and curbed or fresh administrative and technical sanction obtained in time to cover the anticipated excess.
1518. Progress Report-cum-Financial Review.--For effective financial control of works a system which will monitor the relation between achievement and expenditure is essential. Financial Reviews assist in such a monitoring process and also serves as a management reporting system linking the progress of work with the expenditure incurred. Financial Review provides a means of assessing probable variations from sanctioned estimate at the earliest possible date.
1519. Preparation of Progress Report-cum-financial Review.--Financial Reviews are to be prepared half yearly in the proforma given below (Form E-1519) and should include (a) new construction conversions, doublings. (b) open line works costing Rs. 50 lakhs (gross) and over, and (c) track renewal works costing Rs. 50 lakhs (gross) and over.

COMPLETION STATEMENT:
In the cases of work of small value instead of preparing the CR completion statement the form E1817 is prepared on completion of the work showing the following details
reference to estimate
amount if sanctioned estimate
actual expenditure as finally booked
brief explanation for the excess and savings
The CS on receipt in AO is verified in the same manner as any CR and certified. These statements are then submitted to the competent authority for information. No CR or CS is necessary in respect of a work for which no detailed estimate is required to be prepared.

CR FOR LAND:
In the case of projects there is likelihood of delay in regard to the final adjustment of charges on account of land acquisition owing to disputes or litigation beyond the control of the Railways. In such cases therefore the CR may be drawn in two parts separately of land and other than land.

INCIDENCE AND EXPENDITURE ON ACCOUNT OF ROB/RUB
816. If an existing busy level crossing originally provided at Railway's cost is to be replaced by a road over or underbridge the apportionment of the cost of replacement will be as under :-
(i) The Railway will bear 50 per cent of the total cost of the over or under-bridge including approaches. The total cost would include the cost of diversion of road, sewers, cables, gas and water mains, etc., but would exclude the cost of acquisition of any land and structures thereon required for approaches or diversions.
(ii) The Road Authority will bear 50 per cent of the total cost of over or under-bridge including approaches, etc., as referred to above and the cost of acquisition of any land required for approaches and diversions and structures thereon.
(iii) The bridge will generally be of 7.2m.(24 ft.) width to suit two lanes of road traffic. In area within or close to cities and towns, two foot paths (each 1.8/6 ft. wide), may also be provided if required by the Road Authority.
(iv) If provision is required to be made in the bridge structure for crossing additional railways tracks in future the, cost of such extra length of the bridge structure will be borne by the Railway in addition to its share of the cost for the rest of the bridge and its approaches. If the provision for extra tracks is already a sanctioned scheme or included in the Works Programme the cost of extra length of bridge on that account shall also be shared on a 50 : 50 basis between the Railway and Road Authority.
(v) If additional width of roadway is required by the Road Authority over and above the limits of the width specified in item (iii), the cost of this additional width will be borne(
(a) Fully by the Road Authority for the length of the bridge required to span the existing tracks and the future tracks the provision of which has already been sanctioned or included in the Works Programme.
(b) Equally by the Road and Railway Authorities for any extra length provided for crossing additional railway tracks in future, not covered in (a) above.
The Railway will be responsible for the construction of the over or under-bridge proper across the tracks and the Road Authority for the construction of the approaches. On the actual completion of the work, a completion certificate for the work (excluding cost of land and structures thereon) giving the total cost of the work carried out by the Railway and by the Road Authority, separately, will be signed by the representatives of State Government/Road Authority and the Railway. The amount incurred by any party in excess of 50 per cent or its due share of the total cost will be reimbursed by the other party. With a view to ensure that the amount required to be spent in excess of the sanctioned share does not remain under suspense in the books of the party responsible for the execution of the works, arrangement will have to be made in with the State a Government/Road Authority for adjustment in the same year's accounts through transfer transactions of any amount spent by either party in excess of its share of the cost of the bridge.
1817. If an existing road over or under-bridge is required to be raised, lowered, extended widened or rebuilt on a new site, the cost will be borne by the authority requiring such raising, lowering, extension or relocation. Any extra cost due to additional width or length or other facilities required by any authority shall be borne by that authority. Where an existing bridge constructed originally at the cost of the Railway has reached a stage where its regirdering or rebuilding is justified on age or condition basis and the Road Authority desire to have the same regirdered or rebuilt to improve standards, the Railway should agree to bear a portion of the cost of the improved bridge to the extent of the expenditure necessary to replace or rebuilt the existing bridge to the original standards at present day rates.
1818. The maintenance and lighting of the roadway of the bridge and its approaches after its opening to public traffic is a charge against the Road Authority, while the maintenance of the bridge structure generally (excluding the roadway) is a charge against the Railway. Where, however, the cost of the bridge structure is shared by the Railway and State Government/Road Authority, the maintenance charges shall be borne by the parties in proportion to their share of the cost. In case the Road Authority concerned is agreeable, the capitalised value of the maintenance charges may be recovered, calculated on the basis of the average rate of interest applicable to Commercial Departments for that particular year.
Before undertaking construction of any over/under-bridges, the cost of which is to be entirely or partially borne by the Road Authority, they should be required to execute an agreement with the Railway which should inter-alia clearly spell out their liability to bear initial, recurring/maintenance and other costs.
1819. (a) If the construction of a new level crossing or an improvement or alterations in an existing one, whether necessitated by local conditions or any other cause, is asked for by a State Government or local authority, the capital cost of the works asked for will be borne by such Government or authority, except in cases where the liability is that of a Railway under the Railway Act. In regard to the incidence of maintenance costs in such cases no hard and fast rules can be laid down but ordinary maintenance costs should be borne by the party requiring the facility, and agreement to this effect should be reached before the work is commenced. In a case where the party asking for the facility agrees to pay only the initial cost but declines to bear maintenance, the case should be referred to, the Railway Board for orders before any commitment to provide the work is entered into.
(b) If a level crossing provided initially and maintained at the cost of the Railway in compliance with the statutory obligation under the Indian Railways Act is required to be manned (if it is unmanned) or upgraded/provided with additional gatekeepers due to subsequent increase in both road and rail traffic, the initial cost of such manning, additional manning or upgradation is to be borne by the State Government/Road Authority concerned, and the recurring and maintenance cost by the Railway. If such a level crossing is required, to be shifted, the capital cost involved in the shifting of the level crossing, is to be shared equally between 'the State Government/Road Authority and the Railway.
If, however, such a need arises due to subsequent improvement in the standard of the road or change in the nature and volume of the road traffic only, the cost (both initial as well as recurring and maintenance), has to be borne fully by the State Government/Road Authority concerned.. For level crossings provided originally at the cost of State Government/Road Authority the recurring cost on account of its subsequent manning/additional manning or upgradation has also to be borne by the State Government/Road Authority.
(c) If a 'D' class cattle crossing (which is meant for the use of cattle and pedestrians only), is required to be converted into a regular level crossing to suit the requirements of the vehicular traffic, the cost involved (i.e. both initial as well as recurring and maintenance) has to be borne by the State Government/Road Authority concerned.

PRELIMINARY & FINAL WORKS PROGRAMME FOR WORKS
601. Investment decisions relating to the creation, acquisition and replacement of assets on the Railways are processed through the annual "Works, Machinery and Rolling Stock Programme". Instructions regarding the preparation of the Machinery and Rolling Stock Programme are contained in Chapter XV of the Indian Railway Code of Mechanical Department (Workshops). On the basis of the estimate of the Plan funds requirement for the ensuing year, the Railway Board lay down the financial limits (see para 609) under various plan heads (refer to Appendix I) within which the Railway Administrations are required to make out their programme for the following years duly vetted by the Financial Advisor and Chief Accounts Officer for submission to the Railway Board by a specified date. The programmes are examined by the Railway Board and discussed. where necessary, with the General Managers and the works to be undertaken as well as the outlays during the Budget year are decided upon.
602. The various stages of investment planning and preparation of the Final Works Programme arc given below:-
(i) Formulation of schemes as a part of advance planning;
(ii) Submission of major schemes for advance scrutiny and clearance by the Railway Board for selection of Projects to be taken up in the following year;
(iii) Preparation of the Preliminary Works Programme within the financial ceiling laid down by the Railway Board; and
(iv) Discussions with the Railway Board and submission of the Final Works Programme.
The investment planning process through the above stages is dealt with in the following paragraphs.

Advance Planning
603. The preparation of the annual Works Programme of a Railway is not an isolated exercise for the year, but is part of a continuous planning process from the level of the Divisional Officer upwards. Investment proposals emanating from the Division would be those which are intended to effect improvement in operation or remove bottlenecks etc., within the Division itself. Major investment proposals which benefit a Zonal Railway System or the Indian Railway as whole should be co-ordinated and planned at the level of the Railway Headquarters or the Railway Board, where necessary.
604. An important requirement for effective investment planning is the realistic estimation of project costs. Full details of the scheme must be worked out and no scheme should be included in the Railway's Works Programme unless detailed plans and estimates have been prepared and are ready. Detailed Traffic and Engineering surveys should be carried out for new lines, gauge conversions doublings and for other line capacity works costing more than Rupees Five Crores each. In the case of yard remodelling, line capacity works i.e., goods shed facilities and important buildings the estimates should be based on plans approved and signed by the concerned departments who should scrutinise the plans carefully to avoid the need for making any substantial modifications in the required facility it a subsequent stage. If major changes in the plans/scheme/specification of works nevertheless become necessary and arc likely to lead to substantial excesses over the sanctioned estimate the changes asked for by the concerned departments should not be agreed to unless reviewed and approved by the competent authority sanctioning the original estimate. In regard to proposals for new marshalling yards goods terminals and tranship yards etc. work study teams should go into the actual working before formulating schemes for the additional facilities required.
605. It is an essential feature of the railway system as a commercial undertaking that expenditure other than that wholly chargeable to ordinary Revenue, incurred on new assets or for improvement of existing assets should be financially justified before it is incurred. Detailed instructions regarding the financial Appraisal of Railway projects are contained in Chapter II of the Indian Railway Financial Code to which reference may be made. The cases where no financial justification need be given are contained in para 202 of the Indian Railway Financial Code. Detailed financial implications (including financial return) should be worked out in all cases including works financed from Development Fund, Accident Compensation. Safety anti Passenger Amenities Fund or Open Line Works Revenue (see para 626). If the prescribed return is found to be not obtainable on the anticipated level of traffic, the Railway Administration should examine whether the proposal cannot he reduced in scope, or given up in favour of some other alternative. or postponed until traffic prospects improve.
606. When a number of works have to be carried out to achieve a common objective, the financial implications or justification should be worked out for the entire scheme as a whole. In case where the wider schemes covers two railway a joint estimate of cost should be prepared for the Railway Board's consideration, The Railway in which the major portion of the work falls should obtain figures from the contiguous Railway for submitting joint figures of cost anti financial implication to the Railway Board.
Scrutiny of Schemes before preparation of Preliminary Works Programme
607. All schemes costing Rs. 20 lakhs or above should be worked out comprehensively and sent to the Board alone with full details of (i) the technical features. (ii) Cost break-up, (iii) benefit expected to accrue and (iv) financial implications. A sketch map of each proposal should also be sent. The Railway Administration must clearly bring out the purpose of each scheme and confirm that the proposal meets the objective fully and that the scope and cost of the project have been arrived at after the fullest possible investigation including assessment of the financial implications. After the schemes have been scrutinized by the Board, the Railway Administrations should be advised of the acceptance, with or without any modifications for inclusion in the Works Programme.
608. Track renewal proposals costing Rs. 20 lakhs and above are initially scrutinised by the Board, keeping in view the availability of permanent way materials. progress of the works already sanctioned and other technical factors. For this purpose the Railway Administrations should send all track renewal proposals costing Rs. 10 lakhs and above together with technical data like traffic density, age, conditions of track components etc., in the form prescribed by the Board to reach the Boards office by the stipulate date. After the proposals are screened by the Board, guidelines are issued to the Railway Administrations to reframe their proposals for inclusion in the Works Programme.
Preparation of the Preliminary Works Programme
609. The Chief Engineer of the Railway will be primarily responsible for ensuring that the proposals prepared by the various departments are complete in all respects and are correctly prepared. The overall priorities within the ceilings given by the Board will also be fixed by him in consultation with the General Manager and other Heads of Departments. He will be responsible for the preparation and timely submission of the Preliminary and the Final Works Programme.
610. In or about June/July each year the Railway Board should convey to each Railway, in respect of each Plan Head, the total outlay within which the Works Programme should be framed by the Railway. A list of the Plan Heads is given in Annexure I. On receipt of this financial ceiling the Railway Administration should take stock of the schemes already formulated and those under consideration and select for inclusion in the Works Programme within the financial ceiling such works as are expected to yield the maximum benefit to the Railway preference being given to works in progress. Further necessary changes in the investment schedule may be made in order to work within the financial ceiling for the year such modification., being taken note of in framing the Preliminary Works Programme and revising the financial implications. if necessary.
611. The Preliminary Works Programme for the following year should be submitted by the Railways to the Railway Board by 1st week of September or such earlier date as may be laid down by the Board. Proper financial appraisal of each work should be given in the Preliminary Works Programme together with the comments of the Financial Adviser and Chief Accounts Officer.
612. The project cost should be based on firm data both as to quantity and rates at current price levels. and should any increase occur in prices during the period intervening between the initial preparation of the project estimate and its inclusion in the Works Programme. the estimate should be updated taking into account any significant changes in the wages and material prices as well as increase in freights and fares. No other increase such as on account of change in scope of the project should be allowed without prior reasons being adduced for acceptance by the Railway Board. A sketch showing the proposal should accompany each proposal.
613. 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 should be in accordance with this project schedule to enable the Railway Board to arrange for a realistic funds allocation for implementation of the programme.
614. In deciding the outlays for the various works Railway Administration must endeavour to progress all works in progress speedily and bring them into use at the earliest possible date. 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 and provided for as such in the programme. Such works should be grouped as indicated in para 619.
615. The Railway Administrations should make a realistic assessment of the amount required for each work in progress and necessary provision should be made for it in the Works Programme. In estimating the provision for works during the budget year a generous allowance should be made for those delays in execution which though unforeseen are known from experience to be so liable to arise particularly prior to inception anti during the initial stages of large projects. The provision made should take into account adjustment of charges on surveys connected with a project.
616. In exhibiting the outlay for the current year against individual works in the works programme, the outlay should be as per Pink Book, and in exceptional cases where the Railways propose any substantial increase in the outlay with corresponding reductions against other works, such revised outlay may be shown separately in brackets below the outlay as furnished in the Pink Book duly explaining the reasons for doing so in footnotes at the appropriate places. As far as possible only the last sanctioned costs should be exhibited. Wherever it is visualised that the cost would involve an excess over the last sanctioned cost, effective steps should be taken well in time to have the revised estimate prepared and sanctioned by the competent authority before the Works Programme is sent to the Board. In case where the revised estimates are sanctioned subsequent to the despatch of the filial Works Programme but before the end of January of the following years the same should be promptly advise to the Board to enable to the latest sanctioned cost being exhibited in the Pink Book to be circulated alongwith the Budget. In all cases of revised costs sanctioned by the Board, reference to the letter of sanction should invariably be indicated.
617. Works once introduced through a Works Programme (including Track Renewal Programme) and taken up after the estimates have been sanctioned by the competent authority should continue to be included every year till they are finally completed, except in cases where the works have reached the completion stage and where funds required if meagre could be found by re-appropriation.
618. The Works Programme is compiled in the following format:-
Form E. 618
WORKS PROGRAMME 1975-76
Demand No................. (Figures in thousands of rupees)
Item No.
Authority
Particulars of Works
Cost
Expenditure to end of 3/74
Outlay for
Balance
1974-75
1975-76

1
2
3
4
5
6
7
8








Note.-Years have been shown in the form for the purpose of illustration.
In respect of "Works in Progress" reference to item No. of the current year's Pink Book and also the authority under which the work was first started should be indicated. The works should be arranged as per the Plan Heads.
619. The items in the Works Programme should be grouped under the following categories while compiling the Works Programmes:-
(i) New Works.
(ii) Works in Progress.
(ii) Works approved in earlier years, which have not been actually commenced and on which no expenditure has been incurred till 30th June of the year previous to the Programme year.
(iv) Works approved in the earlier years but estimates for which have not been sanctioned by 30th June of the year previous to the Programme year.
620. The works are further made into sub-groups of (i) Works costing more than Rupees Five Lakhs each and (ii) Works costing upto Rupees Five lakhs each. Under (ii) works costing upto Rupees two lakhs each in the case of Track Renewal works and for works costing upto Rupees one lakh each in the case of other works only lumpsum provision should be shown without detailing individual works. Within each sub-group, the works are presented under each Plan Head.
621. A map showing the Railway System and indicating the new lines, doublings, major yard remodelling, important line capacity and signalling works which are in progress as well as proposed should be attached to the Works Programme. An alphabetical index of works and various managerial information regarding critical materials, expenditure position relating to passengers and railways users amenities etc. which will be prescribed by Railway Board should be included.
622. Integrated Budget.-The Annual Budget of Railways consists of assessment of earnings and expenditure forming part of Revenue Budget and that relating to the investment decisions taken through the Works Machinery and Rolling Stock Programmes. In order to co-relate the decisions relating to all these aspects, a consolidated budget called integrated Budget including Revenue Budget, Works Programme and the Machinery and Rolling Stock Programmes should be submitted by the Railways alongwith the preliminary Works Programme. The Integrated Budget will include the projections of traffic and earnings, working expenses, the estimated financial results for the ensuing year, and the operating ratio in the proforma specified by the Railway Board. The Railways should also furnish the details of Rolling Stock required on replacement account and addition account, duly co-relating it to the anticipated increase in traffic. In the covering note to the Integrated Budget the Railways should bring out the effect of the budget proposals on the efficiency of operations as indicated by the operating ratio and the financial viability of the system as revealed by the financial returns on capital investment. After discussion of the Preliminary Works Programme, a revised Integrated Budget should be submitted along with the Final Works Programme duly taking into account the changes that might have taken place in the meantime. The Integrated annual budget may be prepared under the personal guidance of the General Manager and with the assistance of Financial Adviser and Chief Accounts Officer.
Final Works Programme
623. After having examined the individual Railways Programme, and discussions with the General Managers, the Railway Board will decide the works which should be undertaken during the following year and which should be included in the Final Works Programme. The Railway Administration will then modify their Works Programmes as a result of the Board's decision and send their Final Works Programme to the Railway Board by the stipulated date.
Section II- Works Budget
624. Works Budget.-The revised and budget estimates for the construction, acquisition and replacement of assets are briefly known as Works Budget. The revised estimate gives an estimate of funds required for the current year and the budget estimate refers to the following year. For a detailed study of the Railway Budget, Chapter III of the Indian Railway Financial Code should be referred to. The budget estimate for the works are based on the Works Programme approved by the Board. The requirement of funds both for new investments and for works in progress are submitted in the form of "Demand for Grants" in the Works Machinery and Rolling Stock Programme which forms a part of the Budget papers presented to the Parliament. While compiling the Works Machinery and Rolling Stock Programme for presentation in the Parliament only works costing Rupees five lakhs and above are itemised.
Demand for Works Grants
625. The proposal of Government in respect of sums required to meet the expenditure from the Consolidated Fund of India are to be submitted in the form of Demands for Grants to the Parliament. The Demand shall be for gross expenditure, the credits or recoveries (refer to para 335 of Indian Railway Financial Code) being shown in the form of footnotes to Demands.
The Demand for Grants for the Works Budget is :-
Demand No. 16 :-Assets-Acquisitions, Construction and Replacements.
Financing of Works Budget
626. Works chargeable to Demand No 16.- Assets-Acquisitions Construction and Replacements are financed from railway revenue when it is charged to OLWR or financed from Capital. Depreciation Reserve Fund. Development Fund, Accident Compensation Safety and Passenger Amenities Fund. Expenditure budgeted under "Capital" involves increase in the Capital-at-charge of the Railways and hence is the liability for payment of dividend to General Revenue subject to the relief/exemptions granted by the Convention Committee. "Works Expenditure" of the Railway is thus financed from Revenue, Railway Funds and Capital provided by the General Revenues. The Railway Funds are Depreciation Reserve Fund, Development Fund and Accident Compensation Safety and Passenger Amenities Fund. For Details regarding the operation of the funds, reference may be made to Chapter III of the Indian Railway Financial Code. In the event of the railways revenue surplus not being adequate to fully meet the requirements of Development Fund Expenditure, the budgetary support from the General Revenues would also include temporary loans to finance expenditure from the Development Fund. The expenditure under works Budget of the Railways is, therefore, determined by the resource allocation under various Plan Heads.

TIME AND COST OVER RUN IN RAILWAY PROJECTS
On railways the objective is to strengthen the infrastructure of the system and run the transport services as economically as possible. The planning system, therefore, need to be adopted and practiced with foresight, caution and technical skill. The project works are started with the sanction of the detailed estimates. The works-in-progress are controlled with the allotment of funds needed annually. A review of the works after completion has revealed that on a number of projects the time over runs are to the extent of 200 %.
The analyses for these variations as compared with abstract estimates indicate the following reasons:
delays in implementation and execution of the works
underestimation of the project expenditure
want of resources and adequate funds allotment
works started on urgency certificates without the support of detailed traffic surveys and techno economic surveys
The guiding principles for execution of works and avoid the time over runs and cost over runs are described below
it should be ensured that the implementation of the scheme or a project should be within the financial and physical resources
execution should be within the prescribed time schedules
systems like Programme Evaluation Review Technique (PERT), Critical Path Method (CPM) and Bar Charts should be adopted to identify the critical items of work and monitor their progress
it should be ensured that all preliminary works like acquisition of land, preparation of detailed estimates, drawing are done systematically
The cost and time over runs adversely affect the financial appraisals of railway projects. In justifying the projects railways have basically followed Discounted Cash Flow method to calculate the anticipated Rate of Return (ROR). The DCF method basically lays importance of cash flows and the time schedules. Any delays and excess costs while executing the works, will upset the conclusion arrived and decisions taken at the planning stage. The railways at zonal level have full fledged construction organization. There is an imperative need to ensure that projects are completed as scheduled in the planning stage. The decision for project implementation should be based on detailed studies conducted in the from of Traffic Surveys, Final Location Surveys and Techno Economic Surveys

For example, the line capacity can be increased by improved signally systems, provision of crossing facilities, doubling the section in a phased manner. The selection of appropriate scheme should be based on in-depth study and the needs of corporate plan.
The time and cost over runs can be avoided to a larger extent by the following
1. Many errors originate in imperfect knowledge of the field of enquiry. A good knowledge of the area of investigation is essential.
2. The information collected should be subjected to statistical enquiry
3. the analysis of fluctuation from month to month can provide a good way to foresee events with regard to the project implementation
4. the project implementation should be entrusted to the experienced personnel in the field
5. the variable factors in the project implementation should be studied at each stage
The railway management should accord priority to completer the works by allotting adequate funds. The project implementation should be reviewed quarterly at the higher levels of management at zonal railways. Once the project is sanctioned the preparation of detailed plans, estimates should be fixed in a time frame and strictly adhered to.

The following precautions/steps are therefore required to be taken to minimize the time over runs and cost over runs
Each work in progress should be given priority fro early completion by providing adequate funds rather than including more number of new works with lesser allotment of funds.
Meticulous ranking of works on priority basis is of particular significance for works of doubling, traffic facilities, S&T workshop modernization where the objectives are to achieve increased efficiency or better safety.
The co ordination between various executive authorities should be with reference to PERT and CPM charts and not on the basis of routine correspondence to avoid this over runs.
The out lay against each work should be adequate to enable the work being completed within a reasonable time.
To avoid cost over runs the full details of the scheme must be worked out with the realistic assessment of quantities and the prices at the current rates.
no scheme should be included in the railway’s preliminary works programme unless detailed plans and estimates have been prepared and kept ready to avoid time over runs
with a view to improve the system of monitoring the n going works, as per the anticipated schedule, a quarterly review of the works in progress should be conducted at GM’s level with the concerned field officers.
The physical and financial progress should be periodically reviewed by he field officers to ensure completion of the projects on due dates with reference to corresponding period of last year.
for each work the position regarding preparation of plans, estimates, calling of tenders, award of contracts, should time bound to avoid excess over estimates
At present the zonal railways indicate their works in progress in the preliminary works programme received in the railway board by September each year. This time schedule does not give enough time to the railway board to review the progress and issue policy directives. The monitoring system of works in progress should be delinked with the regular programmes and given priority to focus on the delays and consequent time and cost over runs.

PERT and CPM
Project managers frequently face the task of controlling projects that contain unknown and unpredictable factors. When the projects are not complex, bar charts can be used to plan and control project activities. These charts divide the project into discrete activities or tasks and analyze each task individually to indicate weekly manpower requirements. As the work goes forward, progress is charted and estimates are made on the effects of any delays or difficulties encountered during the completion of the project.In the mid-1950s more sophisticated methods of project planning and control were developed.

Two systems based on a network portrayal of the activities that make up the project emerged at about the same time. PERT (Program Evaluation and Review Technique) was first used in the development of submarines capable of firing Polaris missiles. CPM (the Critical Path Method) was used to manage the annual maintenance work in an oil and chemical refinery. Many variations and extensions of the two original techniques are now in use, and they have proved particularly valuable for projects requiring the coordinated work of hundreds of separate contractors.

The use of project planning and control techniques based on PERT or CPM are now common in all types of civil engineering and construction work, as well as for large developmental projects such as the manufacture of aircraft, missiles, space vehicles, and large mainframe computer systems.A simple example of a network, or "arrow diagram," used in developing an electronic component for a complex system, is shown in thefigure figure: Network diagram for the Critical Path Method problem.. Each circle on the diagram represents a task or well-defined activity that is part of the project. The number in each circle represents the expected time required to complete the task.Task A requires two weeks to complete and might, for example, represent the development of general specifications for an electronic unit in question. Tasks B and E might represent two related parts of the design of the unit's power supply, C and F the design of the main functional circuits, and D and G the design of the control circuitry. Arrows indicate the precedence of relationships and depict which tasks must be completed before subsequent tasks can begin. In this example, tasks B, C, and D cannot be started until A has been completed (that is, no one can design specific component items before the general specifications are agreed upon).Task H requires two weeks to complete but cannot be started until the designs of the power supply and the functional and control circuits have been completed. This task might represent the design of the unit's case or cover, and the case cannot be made final until all of the component designs are completed.

A 2
B 1
H 2
C 5
I 2
E 3
F 2
FINISH
F


2










G 3
D 4 KEY


Task identifier
Expected time to complete task

The arrow diagram is an invaluable planning aid for determining how long a project will take to complete. Adding all of the task times together in the example indicates that there are 24 weeks of work to be completed. Note, however, that several tasks can be done simultaneously. For example, once task A has been completed, B, C, and D can be started and worked on concurrently. Thus, the earliest completion date can be determined by looking at all possible "paths" through the network and choosing the longest one, or the one with tasks requiring the most total time. In this example the longest, or "critical," path is A-C-F-H, requiring a total time of 11 weeks.

The arrow diagram yields additional information to the project planner. The earliest possible time that task H can be started is nine weeks after the start of the project (that is, after tasks A, C, and F have been completed). When task A is completed at the end of week 2, tasks B and E do not have to be started immediately in order to complete the project in the minimum possible time; B and E each have three weeks of "slack." The diagram shows that if activity B is started three weeks later than its earliest possible start time (at week 5), it would be completed at the end of week 5; E would then start at the beginning of week 6 and be completed in time for H to begin at its earliest time, the beginning of week 10.

The notion of slack in a project network is a powerful concept that allows planners to schedule scarce resources efficiently and manage people and equipment so that critical activities are kept on schedule and slack activities are delayed without placing the project in jeopardy.This simple example is based on CPM logic; it uses single-point task time estimates and assumes that the completion time for the project is the simple sum of the task times along the critical path. PERT logic assumes probabilistic estimates for each task time, with pessimistic, realistic, and optimistic estimates for the completion times of each task.In actual projects the relationships among the required tasks are often complex, and the arrow diagram for the project might cover the entire wall of an office. Even though it is a time-consuming job to work out arrow diagrams, precedence relationships, task time estimates, and so on for large projects, CPM or PERT is an invaluable aid to planning and control. The proliferation of computer programs that handle critical path and slack time calculations and the development of computer systems capable of handling cost estimates, budget control, resource allocation, and time scheduling promise to make CPM and PERT even more valuable than in the past.(W.K.H.)Copyright © 1994-2001 Encyclopædia Britannica, Inc.___

from research and development:
Project management and planning techniques:
Value engineering and cost-benefit analysis in the areas in which technology advances fastest, new products and new materials are required in a constant flow, but there are many industries in which the rate of change is gentle. Although ships, automobiles, telephones, and television receivers have changed over the last quarter of a century, the changes have not been spectacular. Nevertheless, a manufacturer who used methods even 10 years old could not survive in these businesses.

The task of R and D laboratories working in these areas is to keep every facet of the production process under review and to maintain a steady stream of improvements. Although each in itself may be trivial, the total effect is many times as large as the margin between success and failure in a competitive situation. These efforts to improve existing products and processes have been formalized under the titles of value engineering and cost-benefit analysis.

In value engineering every complete product and every component have their primary function described by an action verb and a noun. For example, an automobile's dynamo, or generator, generates electricity. The engineer considers all other possible methods of generation, calculates a cost for each, and compares the lowest figure with that for the existing dynamo. If the ratio is reasonably close to unity, the dynamo can be accepted as an efficient component. If not, the engineer examines the alternatives in more detail.

The same treatment is applied in turn to each of the parts out of which the chosen component is built, until it is clear that the best possible value is being obtained. Cost-benefit analysis approaches the same fundamental problem from a different angle. It takes each part of a product or process and completely defines its function and the basis for measuring its benefits or effectiveness. Then the costs of obtaining each part are reviewed, taking full account of purchased material, labour, investment cost, downtime, and other factors.

This focuses attention upon the most expensive items and makes it possible to apply the principal effort in seeking economies at the points of maximum reward. In the effort to improve a product or process, care must be taken to evaluate alternatives on the same "cost" and "benefit" bases so that existing approaches do not enjoy a special advantage just because they are familiar. These two processes are unending. Every new material, new manufacturing technique, or new way of carrying out an operation gives the engineer a chance to improve his product, and it is from these continuing improvements that the high degree of economy and reliability of modern equipment derives.(T.S.McL./W.K.H.)Copyright © 1994-2001 Encyclopædia Britannica, Inc.___

SENSITIVITY ANALYSIS

1. simplest of handling risks
2. magnitude in the ROR by small change in the components of which are uncertain
3. selct variable –whose estimated values may contain significant errors or elements of uncertainty
4. key variables are – cost, price, project life, market share etc
5.
Cut off rate
Selling pricegraph

Sales when decline
N P V
Cost of fixed assets
Working capital
Variables cost







Adverse change in variable percentage

Advantage:
1. identify crucial variables that makes greatest impact in the NPV of the project
2. graphical presentation – better visual appeal
3. by confining SA to adverse changes in the variable that can be reasonably expected to occur one can obtain range of NPV that can be reasonably anticipated
4. knowledge is helpful for making decisions

Railways Risk Factors:
1. land - delay in acquisition – litigation
2. earth work availability of sand
3. soil condition – geographical factors –weak/loose Eg TEN-NGC line due to weak soil
4. alignment due to local or popular demand Eg KRCL in Madgaon line in Goa State
5. availability of sleepers – wooden/ Pre Stressed Concrete Sleepers – snags in production- ban on wooden sleepers as environmental policy of the Govt
6. availability of rails – change in the production pattern of the steel mills – delay in production- change in the Govt policy
7. estimated earnings – net production of commodities short fall in projected and traffic due to climatic and natural causes – import and export potential
8. delay in rolling stock in ordered quantity Eg Hassan – Mangalore line for transport of ore to Port of Mangalore diverted to road
9. cost and time over runs – likely delay due to paucity of funds/allotment
MATERIAL AT SITE ACCOUNTS
For works estimated to cost each Rs 1 lakhs or Rs 3 lakhs for relaying or track renewal work in relaxation of the limit of Rs 25000/-.
for stores not used up immediately
suspense head – on receipt of materials is debited with the cost of stores and is credited with issued of materials for work
daily record of such material in form E 1737 materials obtained for work on receipt are entered under with quantity, issued note and reference – Receipts: issues of stores for consumption, the date, quantity, sub head charged are recorded under – Issues . Materials issued but surplus – Minus Issues
materials released from the work are separately recorded as receipts with date, quantity on their utilization of the works shown as issues Materials retuned to stores transferred or otherwise deposed of is shown as minus receipts
works costing more than Rs 1 lakh to Rs 3 lakhs for relaying or track renewal works- monthly Return is sent containing only those items for which there have been any receipts or issue transactions during the month.
the monthly MAS a/c returns may be followed by a complete MAS a/c return for all the items of each quarter June, September, December & March on the basis of monthly returns from sub ordinates, the Divisional Officers prepare monthly adjustments get them approved by DEN and AO for necessary adjustment
periodical verification by the executive in charge for works costing more than Rs 1 lakh to Rs 3 lakhs for relaying or track renewal a. P Way material b. other MAS which can be readily operated and distinguished from any of the description but by a different category all items verified at least once in a year.
A certificate that such verification has been carried out should together with a note as to whether or not the materials were found to be duly depreciated, be furnished on the MAS returns this is in addition to stock verification.
At the end of every financial year the AO prepares a schedule of MAS balances of works of Rs 1 lakh to Rs 3 lakhs for relaying or track renewal and review in consultation with the executive.
At the end of every month, an excess materials return should be prepared in the prescribed proforma in respect of all the completed works. These returns should show separately for materials obtained and material released, the numerical balance only of MAS i.e. those that have neither have been consumed on the work nor returned to stores, transferred or otherwise disposed of and the ate of completion of the work to which they relate. If the excess materials cannot be utilized in some other work they should be returned to stores.

FUNCTIONS OF D A are
q as an accountant he should check arithmetical accuracy of all vouchers fully and compile the accounts of the divn in accordance with the prescribed rules and form the data supplied to him by the sub divns
q As representative of A/c dept he should apply all the checks which is normally applied in the A/c office to the initial a/cs vouchers and other documents
q As financial assistant, he should assist the executive in matters relating to a/c s , budget estimates and to the operation of financial rules generally
q the relation between the DEN and D A is that of a Sub divisional officer and the DEN. The DEN is supposed to consult the DA in all matters involving a/cs,. Finance or budget. The DEN should see that the DA is given fullest opportunity of becoming conversant with all sanctions and orders, estimates and proposals.
The DA is considered as the head of the office establishment of the DEN. While checking accounts and returns whenever the DA finds any irregularity, he should bring to the notice of DEN. If DEN differs from the views of DA he records his orders and the same should be carried out. In such cases DA should maintain a register as DA’s Internal Check Register and enter the same with full details in the register and obtain the remarks of DEN therein. This register is put up to any visiting officer for information
The DA should not however, be made responsible for any cash transaction except emergent cases not exceeding four months.
The DA should maintain cordial relationship not only with DEN but also with all other sub divisional officers and also educate the office staff and subordinates about proper maintenance of records, submission of accounts returns, preparation of budget etc
In the open line divisions also a SO (Works) is posted under the DEN designated as Works Accountant. The functions are the same as DA. However, he is not considered as he head of divisional works branch but will be the head of works accounts section.
The DA is considered as the head of the office establishment of the DEN. While checking accounts and returns whenever the DA finds any irregularity, he should bring to the notice of DEN. If DEN differs from the views of DA he records his orders and the same should be carried out. In such cases DA should maintain a register as DA’s Internal Check Register and enter the same with full details in the register and obtain the remarks of DEN therein. This register is put up to any visiting officer for information
The DA should not however, be made responsible for any cash transaction except emergent cases not exceeding four months.
The DA should maintain cordial relationship not only with DEN but also with all other sub divisional officers and also educate the office staff and subordinates about proper maintenance of records, submission of accounts returns, preparation of budget etc
In the open line divisions also a SO ( Works) is posted under the DEN designated as Works Accountant. The functions are the same as DA. However, he is not considered as he head of divisional works branch but will be the head of works accounts section.

CONTROL OVER EXPENDITURE

The primary duty of the executive is to ensure that the expenditure should be incurred for the purpose for which the vote of parliament has been obtained. it is also the duty of the executive that the expenditure is kept within the funds allotted to an authority. It is the duty of the executive to see that the progress of the expenditure is watched by means of maintenance of certain sets of registers and to keep the aggregate charges within the amount of the grant or appropriation placed at his disposal.

budgetary control and control against detailed estimate:- separate allotments are placed at the disposal of each railway administration under each grant for
i. revenue working expenses
ii. for expenditure on works chargeable to capital, DF, DRF etc. these lumpsum allotments and these distribution over various items of work are indicated in Pink Books, which show in the case of works costing over Rs 1 lakh total estimated cost of each work.
It is the duty of the railway administration to watch that the total estimated cost is not exceeded. In the case of works costing not more than 1 lakh the railway administration should see that the total allotment for a group of work is not exceeded.

Thus the COE on the railways is exercised through
the preparation in advance of the estimates of expenditure to be incurred
allotment of funds to budget grant for the year on the basis of these estimates
the continuous and concurrent review of expenditure as incurred against the details of the estimates and against the sanctioned grants, so that the revision of estimates or reappropriation of funds are arranged for at the earliest point of time.

Control over revenue expenditure: this is done by the maintenance of Revenue Allocation Registers which records all revenue expenditure commencing from the beginning of the year and ending at the end of the financial year( April to March). The object of the register is to advise the executive s regarding the progress of expenditure against the allotment. The allotment as sanctioned is shown at the top of the register in RED ink, so that a comparison may be made at the end of the every month between the expenditure for the month and the proportionate budget allotment.

Control over works expenditure: the control over capital, DF, DRF, OLWR works is done through the medium of works register. The WR shows
i. the expenditure incurred on each work and the detailed provision made for the estimate of the work
ii. the budget allotment for the work and the actual expenditure to end of the month

The executive officer should examine the WRs monthly and watch the progress of expenditure on each work so that these are no excess over sanctioned estimate.
The AO should also watch the progress of expenditure on works and advise the executive regarding the necessity of re appropriation of funds where necessary. The AO should also see whether
(a) the expenditure up to any date is not in excess of the estimate for the quantity executed
(b) the anticipated credits have actually been realized
(c) All adjustments are made in time.

The revenue allocation register is closed every year and the total expenditure compared with the total allotment for the year. The works register is closed only on completion of work and comparing the expenditure with the sanctioned estimate.

Budget exercises:
The expenditure to be incurred for the ensuing year is envisaged as early as in Nov the previous year based on the actual expenditure up to that period and approximate projection for the ensuing year. Finally this estimate becomes the basis for Demands for Grants to be voted in the parliament. While advising the zonal railways, the railway board specifies a spending limit to be adhered to by each zonal railway. Based on the budget orders, the proportionate requirement is distributed to twelve months and cash authorization is advised for each month. The cash authorization is cross checked with the actual cash expenditure at the end of the month to enforce budgetary discipline on units which have incurred expenditure beyond the authorization.

Fiscal Review exercises:
Review exercises are basically aimed at informing the railway board about the expenditure vis-à-vis earnings to be submitted to the parliament which originally sanctioned the demands for grants. The first is the august review which takes in to account the actual for the April, May, June and the approximate for July to review the financial situation. The second being the financial review in December. The third is the final modification in January and the fourth is the violent modification in February. Thus the review exercises also contribute greatly to control the expenditure.

Account currents:
In railways, the approximate and actual accounts current are prepared for the purpose of “ways and means” to enable the finance ministry to monitor excess / savings over the granted budget allotment. The approximate account current separately for revenue and capital are submitted in the first week of the subsequent month and the actual account current is submitted in the third week of the subsequent month. This account current contributes greatly to control the expenditure.

Control over capital expenditure:
All items of expenditure chargeable to capital, DRF, DF, OLWR other that Rolling Stock are programmed through works program. the proposals for creation, acquisition an replacement of assets on railways are processed through the annual works programme. The items of works to be included in the works programme is prepared by the individual departments and finally compiled for the railway under the supervision of chief engineer. The programme is prepared within the financial ceiling limits of probable out lay of funds as laid down by the board under various plan heads. Each zonal railway should submit the works programme for the following year to the railway board duly vetted buy FA&CAO by the specified dates. This is largely exercised through advance planning like Preliminary Works Programme and Final Works Programme. These programmes are accepted after meticulous planning and the financial justification. Thus the exercise acts as medium for controlling the capital expenditure.
The works chargeable to the above funds are initially framed by the concerned executive authorities in the form of abstract estimates (excluding items started on Urgency certificates and are thoroughly scrutinized buy the associate accounts officer from a finance angle. The points of check include
the propriety of expenditure to ensure that the amounts are properly and legitimately chargeable to the railways
the financial out lays are realistic and are based on factual data
the incidence and classification of charges are correct
the estimates are devoid of errors and omissions
The importance of works programme is further notable from budgetary control point of view since all proposals would be subjected to finance scrutiny with reference to guidelines on the subject. Thus, the itemized works programme is the tool for control over expenditure while executing the work.
Liability register: it is the responsibility of railway administration to ensure that the requirement of funds are realistically assessed and suitably provided for in the budget.

Parliamentary control over expenditure:
IR being the largest departemental undertaking of the GOI, their functions and finances are watched, monitored, and controlled by Parliament. The finances and performance of the IR as a commercial enterprise are controlled by the Railway Management (Railway Board).

Parliamentary control: the control of parliament over railway finances is exercised as follows:
voting the railway budget and review of the budget through appropriation accounts under various articles of constitution of India
Review of the policy and finances of railway by parliamentary committees viz, Estimates Committee, Public Accounts Committee, and Railway Convention Committee.
Parliamentary Financial Committees: even though parliament discusses the demands for grants for sufficiently long period before voting, due to magnitude and complexity of state activities, it is almost impossible for the parliament as a body to scrutinize the myriad expenditure proposals and Govt activities. In order to help it exercise effective control over public expenditure, Lok Sabha has set up three financial committees viz Estimates Committee, Public Accounts Committee, and Committee on Public Undertakings. Railway Convention Committee is an ad hoc committee functions like a finance committee.
Estimates Committee:
Public Accounts Committee
Railway Convention Committee


MODVAT RULES
MODVAT RULES are introduced with effect from 01.03.1986. Briefly it is the credit of duty paid on excisable goods used as inputs.
WHAT IS IT: These new rules seek to introduce a new scheme for allowing credit of the duty paid on specified inputs used in the manufacture of specified final products. The modvat rules contain a set of provisions relating to grant of credit of duty paid on inputs used in the manufacture of final products.
WHERE APPLICABLE TO: modvat credit is available in respect of the duty that may be specified and paid on goods (inputs) used in or in relation to the manufacture of final products. All inputs including packing materials are eligible for the relief. However, modvat relief is not available for duty paid on non consumables capital goods used in the manufacture of final products such as plant and machinery etc and the like.
WHERE EXEMPTED: Duty paid on the packaging materials whose value is not included in the assessable value is also not entitled for the credit. Credit is also not available in respect of cylinders for packaging gases etc. also textiles, tobacco and petroleum products are exempted from this benefit.
Tenderer should invariably quote in their quotations that “ we hereby declare that in quoting the above price we have taken into account the entire credit on inputs availed under the modvat scheme introduced w e f 1.3.86. We further agree to pass on such additional duties and set offs as may become available in future in respect of all the inputs used for the manufacture of he final product on the ate of the supply under the modvat scheme by way of reduction in price and advise the purchaser accordingly.
When the contract is silent on excise duty, no adjustment will be made in the bills.
Where the contract indicates rates are inclusive of ED and supplier does not claim increase in ED the accounts office will pass the bill, provided that the supplier furnished a certificate as per annexure A signed by a director of the company or a partner of the firm or the proprietor or by a chartered accountant of by an auditor.
Where the contractor indicates Ed extra with or without specify percentage, accounts department shall pass the contractors hill initially excluding the ED asking the supplier to claim through supplementary bill after issue of amendment by the COS who shall get the certificate as stated in the rule and obtain finance concurrence before issue of amendment.
Chapter 86 lays down the rate of ED on railways locomotives, rolling stock or parts thereof, track fixtures and fittings a parts thereof mechanical traffic signally equipments of all kinds. Previously railway locomotives, wagons, coaches and many other goods produced in the railway workshops were exempt from duty. Now the situation had changed. Railway products are liable to pay the ED at nominated rates.
ULTIMATE GOAL: introduction of modvat will increase the cost of the final product considerably through the availability of instant reimbursement of duties paid on the inputs and consequential reduction of interest costs. Consequently the scheme would benefit both the consumers and exporters.



ANALYSIS OF PASSENGER TRAFFIC BY CLASS OF TRAVEL
2000-2001

PASSENGER JOURNEYS
CLASS
PASSENGER EARININGS
29 %
Non suburban second ordinary
17.7%
6.5 %
Non suburban second mail & express
24.8%
3.3%
Non suburban second sleeper class
28.7%
0.8%
Non suburban upper class
20.8%
60.4%
Suburban
11.0%

ANALYSIS OF PASSENGER TRAFFIC BY NATURE OF FARES PAID
PASSENGER JOURNEYS
CLASS
PASSENGER EARININGS
23.3%
Non suburban full fares
81.7%
3.4 %
Non suburban reduced fares
5.6%
12.8%
Non suburban season tickets
1.8%
21.3%
Suburban full fares
6.0%
39.2%
Suburban season tickets
4.9%

FEE STRUCTURE
CLASS
ORDINARY
MAIL /EXPRESS
SECOND CLASS
100
100
SECOND CLASS
155
155
AC CHAIR CAR

300
AC 3 TIER SLEEPER

450
FIRST CLASS
525
525
AC 2 TIER SLEEPER

720
AC FIRST CLASS

1440






CONCRETE SLEEPERS
MIC
Audit observations:

1. Material supplied for production of concrete sleepers and high tensile steel wires but the firm has not supplied the concrete sleepers within the agreed to delivery schedule. Rs.56.38 Lakhs worth of HTS is lying waste from 1992 till 2000. These are rusting as these are stocked in open space though as per the contractual provision these are to be kept in a covered space.
2. Malleable cast iron (MIC) unused and defective MICs are to be returned to the Railway admin but MIC s worth Rs. 2950779 were not returned.


1
Demand No 1
Expenses incurred by the Railway Board


2
Demand No 2
Miscellaneous Expenditure - Records the expenditure pertaining to Railway Recruitment Boards, Research and Standard Organization, Lucknow, Railway Claims Tribunal, Railway Rates Tribunal, Statutory Audit, Survey etc.


3
Demand No 3
General Supervision and Services- Common to all Depts. Including the Office of the General Manager, Divisional Railway Manager - both the staff and non - staff expenditure. Consists of Financial( accounts ), Personnel, Materials, Way and Works, Rolling Stock, Electrical ,Signal and Telecommunication and Traffic Management.


4
Demand No 4
Repairs and Maintenance of Permanent Way and Works- The staff and non - staff expenditure of the technical side pertaining to civil Engineering Dept. including Bridge, water supply, maintenance of buildings etc.


5
Demand No 5
Repairs and Maintenance of Motive Power The staff and non - staff expenditure of the technical side pertaining to Mechanical Engineering Dept. including maintenance of steam, diesel locomotives both in open line and in workshops etc.


6
Demand No 6
Repairs and Maintenance of Motive Power The staff and non - staff expenditure of the technical side pertaining to Mechanical Engineering Dept. including maintenance of coaches, wagons both in open line and in workshops etc.


7
Demand No 7
Repairs and Maintenance of Plant and Equipment. The staff and non - staff expenditure of the technical side pertaining to Civil, Mechanical, Electrical, Signal & Telecommunication Engineering both in open line and in workshops etc.


8
Demand No 8
Operating Expenses - Rolling Stock and Equipment. The staff and non - staff expenditure of the technical side pertaining to Running Staff ( Drivers, etc).

9
Demand No 9
Operating Expenses Traffic / Commercial - Records the staff and non - staff expenditure of the Train Passing Staff and Commercial Staff like the Station Masters, Points Man, Booking clerks, Reservation Clerks ,Guards etc.

10
Demand No 10
Operating Expenses - Fuel - Records the cost of coal , Diesel Oil and Electricity only.

11
Demand No 11
Staff Welfare and Amenities Records the expenditure of the railway schools, hospitals and health units, sanitation in railway colonies, sports and railway institutes, repairs to residential and welfare buildings.

12
Demand No 12
Miscellaneous Expenditure Records the expenditure on the Railway Protection force, Commercial claims, cost of training to staff, Workman compensation, Catering and Hospitality and entertainment etc.

13
Demand No 13
Provident Fund, Pension and other Retirement Benefits

14
Demand No 14
Appropriation to DRF, DF and Capital Fund
15
Demand No 15
Dividend to General Revenue
16
Demand No 16
Assets: Acquisition, Construction and Replacement

SALIENT FEATURES OF THE REVISED CLASSIFICATION:
1. Demands 1 and 2 are the nature of General On cost as formulated by the Study Team 1970 of the Administrative Reforms Committee. These expenses are common to all railways.
2. Demand No 3 common to each railway as the management and office establishment are charged to this demand.
3. Demand Nos. 4,5,6 and 7 are the nature of maintenance cost otherwise known as common cost in the Traffic Costing of the Railways.
4. Demand Nos. 8,9 and 10 are the nature of direct ( cost ) expenses.
5. Demand No 11 pertains to Staff Welfare as suggested by the Estimates Committee 1955 in their 31st Report.
6. Demand No 12 incorporates all the expenses that do not fit into the above functional demands.
7. Demand No. 13 pertains to all Retirement Benefits as the concept has been enunciated by the Study Team on Reforms in the Structure of Budget and Accounts 1970.
8. Demand No 14 and 15 pertains to all Appropriation to Funds and Dividend.
9. Demand No 16 pertains to acquisition to capital accounts.


CLASSIFICATON OF EXPENDITURE
1
Demand No 1
Expenses incurred by the Railway Board


2
Demand No 2
Miscellaneous Expenditure - Records the expenditure pertaining to Railway Recruitment Boards, Research and Standard Organization, Lucknow, Railway Claims Tribunal, Railway Rates Tribunal, Statutory Audit, Survey etc.


3

Demand No 3
General Supervision and Services- Common to all Depts. Including the Office of the General Manager, Divisional Railway Manager - both the staff and non - staff expenditure. Consists of Financial( accounts ), Personnel, Materials, Way and Works, Rolling Stock, Electrical ,Signal and Telecommunication and Traffic Management.


4
Demand No 4
Repairs and Maintenance of Permanent Way and Works- The staff and non - staff expenditure of the technical side pertaining to civil Engineering Dept. including Bridge, water supply, maintenance of buildings etc.


5
Demand No 5
Repairs and Maintenance of Motive Power The staff and non - staff expenditure of the technical side pertaining to Mechanical Engineering Dept. including maintenance of steam, diesel locomotives both in open line and in workshops etc.


6
Demand No 6
Repairs and Maintenance of Motive Power The staff and non - staff expenditure of the technical side pertaining to Mechanical Engineering Dept. including maintenance of coaches, wagons both in open line and in workshops etc.


7
Demand No 7
Repairs and Maintenance of Plant and Equipment. The staff and non - staff expenditure of the technical side pertaining to Civil, Mechanical, Electrical, Signal & Telecommunication Engineering both in open line and in workshops etc.


8
Demand No 8
Operating Expenses - Rolling Stock and Equipment. The staff and non - staff expenditure of the technical side pertaining to Running Staff ( Drivers, etc.

9
Demand No 9
Operating Expenses Traffic / Commercial - Records the staff and non - staff expenditure of the Train Passing Staff and Commercial Staff like the Station Masters, Points Man, Booking clerks, Reservation Clerks ,Guards etc.

10
Demand No 10
Operating Expenses - Fuel - Records the cost of coal , Diesel Oil and Electricity only.

11
Demand No 11
Staff Welfare and Amenities Records the expenditure of the railway schools, hospitals and health units, sanitation in railway colonies, sports and railway institutes, repairs to residential and welfare buildings.

12
Demand No 12
Miscellaneous Expenditure Records the expenditure on the Railway Protection force, Commercial claims, cost of training to staff, Workman compensation, Catering and Hospitality and entertainment etc.

13
Demand No 13
Provident Fund, Pension and other Retirement Benefits

14
Demand No 14
Appropriation to DRF, DF and Capital Fund
15
Demand No 15
Dividend to General Revenue
16
Demand No 16
Assets: Acquisition, Construction and Replacement


l











Central charges – demand No 1 & 2



Overheads demand no 3


Overheads demand no 11, 12 & 13

Repair cost demand no 4, 5, 6, &7


Basic cost demand no 8, 9, & 10


CLASSIFICATION OF EARNINGS
ABSTRACT
DETAILS
REMARKS
X
Coaching earnings consisting passenger, luggage, parcels,

Y
Goods earnings

Z
Sundry other earnings


Classification of capital sources

APLPHA
NUMERIC
SUBJECT
P
20
CAPITAL
Q
21
DRF
R
22
OLW- R
S
23
33
43
53
DF I (P)
DF II (L)
DF III (U)
DF IV (S)
T
26
RSF
U
27
SRSF

PDEMANDS FOR GRANTS FOR EXPENDITURE ON RAILWAYS AND THE NATURE OF EXPENDITURE COVERED BY EACH

The proposal of Government in respect of sums required to meet the expenditure proposed to be met from the "Consolidated Fund of India" are submitted in the form of "Demands for Grant" to the Parliament. The Demand shall be for gross expenditure the credits and recoveries being shown in the form of footnotes to Demands. The Demands are divided into sub-heads and detailed heads -

The demands for grants represent basically the estimated expenditure proposed to be concurred in a 'Single” and homogenous group of functions broken up further into detailed activities.
At present there are 16 demands for Grants for expenditure of the Central Government on Railways These are detailed below. The nature of expenditure booked against them is shown against each.

DEMAND NO, 1 - RAILWAY BOARD:-
This demand is for expenditure on Railway Board. The credits under this represent recoveries from the Ministry of works and Housing (CPWD) for expenditure on the maintenance of Rail Bhavan, which is arranged by the Railway Ministry in agreement with the Ministry of works and housing.

DEMAND NO. 2 - MISCELLANEOUS EXPENDITURE (GENERAL)
This demand includes
a The cost of surveys or preliminary investigation to examine the feasibility and prospects of new line construction and other projects:
b) Expenditure on the Research Designs and Standards Orgainsation, which is attached to, but not part of Railway Ministry.
c) Expenditure on miscellaneous special establishments dealing with problems affecting the working of the Railways as a whole but not part of the Ministry like the Railway Inspectorate, Central Bureau of investigations railway liaison offices etc.,. Credits under this is head refer to the recoveries from CBI for the Railway staff seconded to the CBI.
d) Expenditure on Statutory Audit. The charged amounts represent the cost of the railway Wing of the office of the Comptroller and Audit General of India,
e) Expenditure regulated by contracts on -
i) The share of net earnings payable to owners of branch lines worked by, and as part of the Indian Govt. Rly. system,
ii) Subsidy and rebate to such branch lines to make up their total earnings to specified minimum;
iii) Subsidy payable to lines owned and worked by certain private companies when their net earnings do not give the guaranteed return on their capital,
f) Expenditure on Misc, charges like the Railways contribution to the experimental research stations at Khadakvasala, Subscriptions to the International Railway Congress Association enrolment of Indian Railways as an associate member of the International Union of Railways, on hospitality and entertainment expenses in connection with the visits of foreign dignitaries etc.

DEMAND NO. 3 GENERAL SUPERINTENDENCE AND SERVICE
This demand is for expenditure on the Zonal Head quarters and Divisional Office of Railway Administrations- For the Accounts, Personnel and Stores Departments, this demand includes the expenses at the Divisional, Workshop and Depot level also.
The credits or recoveries under this Demand relate to commission charges recovered from the Defence Department for audit of warrants and credit notes connected with military traffic and the cost of staff recovered from non-Railway Departments for work done on their behalf for service rendered to them.

DEMAND NO. 4 - REPAIRS AND MAINTENANCE OF PERMANENT WAY AND WORKS
This Demand is for expenditure on Repairs and Maintenance of the P-Way assets like track, other buildings and structures, Repairs and Maintenance of railway colonies , staff quarters and welfare buildings are included under Demand No, 11,
The credits under this demand are for materials released from works charged to Revenue and share of credits for freight on Railway materials including coal.

DEMAND NO. 5 - REPAIRS AND MAINTENANCE OF MOTIVE POWER
This Demand is for expenditure on repairs and maintenance of motive power.
The credits under this Demand arc mainly for materials released from works charged to revenue and share of credits for freights charges on Railway material, including coal.

DEMAND NO. 6 REPAIRS AND MAINTENANCE OF CARRIAGES AND WAGONS
This demand is for expenditure on repairs and maintenance of carriages and wagon including Electric Multiple Unit Coaches-
The credits under this Demand are mainly for materials released from works charged to revenue and share, of credits for freight charges on Railway materials including coal.

DEMAND NO 7 - REPAIRS AND MAINTENANCE OF PLANT AND EQUIPMENT
This demand is for expenditure on repairs and maintenance of all plant and equipment by the Civil, Mechanical, Electrical and signals and telecommunications, engineering departments,
The credits under this Demand are mainly for materials released from works charged to revenue and share of credits for freight charges on Railway materials.

DEMAND NO. 8 - OPERATION EXPENSES - ROLLING STOCK AND EQUIPMENTS
This demand is for expenditure on the operating expenses of mechanical, electrical, signalling and telecommunications equipment including Rolling Stock.
The credits under this Demand are for share of credits for freight on Railway materials including coal,

DEMAND NO. 9 - OPERATING EXPENSES - TRAFFIC
This demand is for expenditure on Traffic operating and Traffic Commercial Departments (excluding claims organisation) This demand also includes Lease Charges of IRFC-
The credits under this Demand are for share of credits for freight on Railway materials including coal credit of unconnected coal wagons which used to be accounted for as earnings prior to 1972-73 are also included under this demand,

DEMAND N0.10 - OPERATING EXPENSES - FUEL
This demand is for expenditure on coal and other fuel for loco purposes, freight and handling charges, including fuelling of engines, sales lax, excise duly and cess on coal and electric current for traction purposes.
The credits under this Demand are for the value of cinders and coal ash sold, credits for electric energy supplied to outsiders and share of credits for freight charges on Railway materials, including coal. The credits for freight charges on coal in this and other demands offset the increase in Gross Budget in this Demand on account of freight.

DEMAND N0.11 - STAFF WELFARE AMENITIES
This demand is for expenditure on educational and medical facilities, health and welfare services, canteens and other stall amenities, repairs to staff quarters, residential and welfare buildings.
The credits under this demand relate to school fees collected, grants-in-aid to Railway schools received from State Governments,

DEMAND NO. 12 - MISCELLANEOUS WORKING EXPENSES
This demand is for miscellaneous working expenses like security, compensation claims for goods lost or damaged as also under workmen's compensation Act, catering expenditure on Hospitality and entertainment and the suspense heads which do not form part of other functional demands.
Credits or recoveries under this Demand relate mainly to credits adjusted under suspense heads-

DEMAND NO. 13 - PROVIDENT FUND, PENSION AND OTHER RETIREMENT BENEFITS
This is a composite Demand for all retirement benefits like Government Contribution to P-F, Special contribution to PP and payment of Pensionary charges to Railway staff covered by the retirement benefits. The various pension and other retirement benefits to pensionable employees are met out of Pension Fund and contributions to P.F. and payment of gratuities and special contribution, in respect of non-pensionable employees are met out of revenue.
Credits or recoveries represent service contribution from other Departments/Ministries in respect of staff on deputation. This gross demand includes recoupment from the public account to the consolidated fund of India of the sums voted initially by Parliament from out of the consolidated fund of India for meeting the expenditure chargeable to Pension Fund.

DEMAND NO, 14 - APPROPRIATION TO FUNDS
This demand is for appropriation from Revenue to the various Railway funds as under:-
a) Appropriation to DRF (As per RCC recommendations)
b) “ to pension fund (As per RCC recommendation)
c) " to Development fund (Out of revenue excess after Payment of dividend) ...
d) " to Capital Fund (Keeping in view the Plan requirement for building up infrastructure out of internal resources)

DEMAND NO. 15 Dividend to General Revenues, Repayment of loan taken from General Revenues and Amortisation of over capitalization. This demand is for payment lo General Revenue and contribution for grants to Slates in line of passenger fare lax,

DEMAND NO, 16 ASSETS ACQUISITION - CONSTRUCTION AND REPLACEMENT
This demand is for expenditure on Assets-Acquisition, construction and replacement, whether met out of loans to he obtained from the General Exchequer on internal resources of the Railway viz. Revenue, the DRF, the DF and the Capital Fund. No re appropriation of funds will be permissible between Capital, Railway Fund and Revenue, credits or recoveries represents adjustment in the accounts as reduction of expenditure, but are outside the scope of the gross demand. The gross demand, includes recoupment from the public account to the consolidated fund of India of the sums voted initially by Parliament from out of the Consolidated Fund of India, for meeting the expenditure chargeable for the DRF, DF and Capital Fund

The charged expenditure under all the demands (except demand no, 14 and 15) is for payment in satisfaction of court decrees and arbitration award where made into rule of the court.


J