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Commercialpedia Indian Railways commercial circulars and policies

detailed heads representing a particular activity the component of such activity are further analyzed under different units, called Primary units of…

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TypeCommercial Circular
Topicreservation

Summary

detailed heads representing a particular activity the component of such activity are further analyzed under different units, called Primary units of expenditure. This primary unit-wise analysis enables easy assessment of fixed, semi variable and variable costs. Each demand is of revenue expenditure, (a part of Miscellaneous Expenditure as mentioned

Text of the circular

ACCOUNTS

Contents  
SN 
Subject  
Page No. 
1 
Functions of Accounts Department 
8-12 
2 
Canons of Financial Propriety 
13 
3 
Statutory Audit 
13-15 
4 
Accounts Inspection of Executive Offices 
15-16 
5 
Schedule of Powers 
16-17 
6 
Tenders & Contracts 
17-27 
7 
Budgeting on Railways 
27-28 
8 
Demands for Grants 
28-38 
9 
Budgetary Exercise 
38-40 
10 
Budget documents 
40-41 
11 
Budget Cycle 
41-42 
12 
Structure of Railway Budget 
43-45 
13 
Primary Units (Objects) of expenditure 
46-52 
14 
Traffic earnings 
53-54 
15 
Various Funds maintained by the Indian Railways 
55-56 
16 
Internal check of expenditure 
56-63 
17 
Cash Imprest 
63-64 
18 
Earning Accountal 
64-66 
19 
Role of TIA 
67-69

FUNCTIONS OF ACCOUNTS DEPARTMENT 
Historical 
Background 
There were 33 separate Railway administrations (4 by Govt., 5 by Indian states & 
24 run by Private Companies) headed by an ICS officer who was assisted by 1 
Secretary, 3 Deputy Secretaries, 4 Under secretaries & 4 Assistant Secretaries 
and the Accounting and auditing was being done by the Accountant General of 
the Public Works Department. It was increasingly felt that the Railway Finances 
should be separated from the General Finances as though the Railway demands 
were only 2 out of some 100 demands of the General Finances and any 
fluctuations in the railway demands caused violent fluctuations in the General 
Finances.    
The most important land mark in the history of the financial administration on 
Railways in India was the appointment of the Financial Commissioner for 
Railways in April, 1923 with the sanction of the Secretary of State for India, as 
part of the scheme of re-organization of the Railway Board as recommended by 
the Acworth Committee (1921). The declared object of this appointment was to 
secure, firstly, economy in the expenditure of public moneys, and secondly, the 
coordination of financial policy of IR with the general financial policy of the 
Government of India. This was followed by the Separation Convention of 1924 
by which Railway finances were separated from the General Finances of the 
Government of India.  
The Financial Commissioner is the professional head of the Railway’s Financial 
Organization and represents the Government of India, Ministry of Finance on the 
Railway Board. In his capacity as ex-officio Secretary to the Government of India 
in the Ministry of Railways in financial matters, he is vested with full powers of the 
Government of India to sanction Railway expenditure subject to the general 
control of the Finance Minister. This arrangement is intended to ensure that 
financial control over operations of the Railway Department is exercised from 
within the Organisation by an officer who shares with the Members and the 
Chairman, Railway Board the managerial responsibility as a senior partner in the

common enterprise of efficient and economic working of the Railway undertaking. 
In the event of a difference of opinion between the Financial Commissioner and 
other Members & the Chairman of the Railway Board, the former has the right to 
refer the matter to the Finance Minister. The Financial Commissioner is assisted 
by Additional Member Finance and Additional Member Budget and Advisor 
Accounting reform and Advisor Finance Commercial Establishment.  The various 
directorates of Finance at Railway Board deal with Accounts matters, Accounting 
reforms, Finance, Finance (Budget), Finance (Commercial, Establishment), Pay 
Commission, Statistics and Economics.  These are headed by various Executive 
Directors belonging to the Indian Railway Accounts Service. 
Evolution 
of 
Financial Systems 
of Indian Railways 
: In 5 Stages 
i. 
Railway finance was a  part of Finance department and Accounting was 
done  by the AG, 
ii. 
Appointment of Financial Commissioner in 1923. 
iii. 
AG replaced by Controller of Railway Accounts and Director of Railway 
Audit under Auditor General. Beginning of IRAS. 
iv. 
Railway accounts under GM

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