GENERAL

RULES &
PROCEDURES

2010
Short Notes for Appendix III A

Sr.DFM’s Office
South Western Railway, Hubli
Division
2/8/2010
2 Short Notes for Appendix III - A
 INDEX

1. Demand payable
2. New service/instrument of service
3. Vote on account
4. Dead stock
5. Remittance transactions
6. Unaccounted on invoices
7. Accounts office balance sheet
8. Custody stores
9. Appropriation bill
10. Approximate account current
11. Pro forma on cost
12. Urgency certificate
13. Cash in transit
14. Ways and means
15. Materials at site account
16. Stores in transit
17. Memo invoices
18. Open line works revenue
19. Workshop general register
20. Objectionable
21. Transfer transactions
22. Cash remittance note
23. Non-issue tickets
24. Handling bill
25. Goods cash book
26. General on cost
27. Machine prepared abstracts
28. Stock sheet
29. Railway convention committee
30. Wagon turn around
31. Joining time
32. Public accounts committee
33. Operational ratio
34. Inflated mileage
35. Transfer grant and packing allowance
36. Productivity test
37. Inked entries
38. Estimate committee
39. PNR number
40. Roneoed lists
41. Idle time
42. Depot transfer
43. Job cards and plus cards
44. Freight deposit scheme
45. Station to station rates
46. Dividend reliefs

3 Short Notes for Appendix III - A

 47. Late tenders
48. Running allowance
49. Railway tariff enquiry committee
50. Last in first out
51. Supplementary demand
52. Demand for grants
53. Incentive
54. Error sheet
55. Under charged statement
56. Railway claims tribunal
57. Line capacity
58. Bin cards
59. Station outstanding
60. Limited tenders
61. Stock adjustment account
62. Capital at charge
63. Specific fuel consumption
64. Firm’s credit note
65. Inventory turnover ratio.
66. Imprest cash
67. Returned stores
68. Liquidated damages
69. Next below rule
70. Apportionment of goods earnings
71. Credit note
72. Container services
73. Deposit works
74. Corporate plan
75. Focal point bank system
76. Traffic suspense
77. Divisionalisation of stores
78. Advice of internal check
79. Appropriation accounts
80. Reserve price
81. Budget order
82. Price variation clause
83. Passenger classification
84. Asset register
85. Post check system
86. Calendar of returns
87. Equated track kilometer
88. Railway act 1989
89. Commissioner of railway safety
90. Railway service (conduct) rules
91. Permanent negotiation machinery
92. Staff benefit fund
93. Block account

4 Short Notes for Appendix III - A

1. DEMANDS PAYABLE:
Demands payable is a suspense head of accounts under the major head 3002, 3003 Indian
Railway Commercial Strategic Lines – Working Expenses.

This account serves the same purpose as ‘Traffic Account’ for earnings. It is one of the most
important heads linking Government Accounts with Railway Commercial Accounts.

This is the suspense head of accounts under ‘Deduct Working Expenses’. As the revenue account
of each month records the expenses of the month without taking into the account the extent to which
these have been liquidated, this head is intended to collect all the revenue liabilities of the month and
also records the actual discharge of such liabilities when payment is made. Therefore subsequently the
balance under this head will always be a credit figure representing outstanding liabilities. A separate is
kept for each month.

a) The balance of this account should be proved by details of items.

b) That there are, no debit items.
c) That outstanding balance under this head represents the revenue liabilities not discharged.

2. NEW SERVICE/INSTRUMENT OF SERVICE:

This item is not susceptible of an exact definition and is governed by the case law decided by the
Public Accounts Committee from year to year.

It is the responsibility of the Railway Board to ensure that the total expenditure against a grant
voted by Parliament or appropriations sanctioned by the President does not exceed the amount of grant
or of the appropriation. They are also required to watch that the money voted by the parliament is spent
on the purposes set out in the detailed estimate presented to the Parliament along with the demands for
grants and is not utilized for expenditure on ‘New Service’ not contemplated in the Budget.

The Constitution of Indian provides that when a need has arisen during current financial year for
incurring expenditure upon some ‘New Service’ not contemplated in the Annual financial statement
(Budget), a statement should be placed before both the houses of parliament for the estimated amount
of expenditure. The constitution does not define what is, ‘New Service’ and only a case law settles the
new service.

However, in the light of decision taken by CAG and the Public Accounts Committee, the terms
‘New Service’ can be understand as an expenditure arising out of a new policy decision not contemplated
at the time of budget. This may include new activity, or a new form of investment.

Some Examples of New Service are:

i) Investments in private sector companies to be made for the first time.
ii) Additional grants-in-aid to private institutions exceeding 10 lakhs.
iii) Additional investments of more that Rs.1 Crore in an existing departmental undertaking.
iv) Setting up of commissions of enquiry, if the expenditure is likely to exceed Rs.4 Lakhs.
v) Setting up of a New Government Company.

3. VOTE ON ACCOUNT:
The Constitution of India provides for the grant of funds in advance by the Parliament for the
period of a financial year as a temporary measure in order to enable the Government to carry on the
Public Services from April of financial year till the passing of Appropriation Bill. Such grants are known as
“Vote on Account”. Such an event occurs generally when the formation of new Parliament is likely to take
some time and the grants for the entire year cannot be voted by the new house after general elections in
the country have been finalized.

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4. DEAD STOCK:
In office parlance, office equipment and furniture are known as Dead Stock and dead stock
register is maintained giving Number of tables, chairs, almirahs etc. and in whose possession.

Dead Surplus Stores comprise items of stores which have not been issued for a period of 24
months and are not likely to be utilized on any railway within the next 24 months. These are not marked
in price list.

5. REMITTANCE TRANSACTIONS
Remittance transactions are cleared through the Reserve Bank of India. These are transactions
between Railway and other Government departments or State Governments. The adjustment through
the issue of advices of clearance by various accounts officers and memo of clearance (A420) issued by the
Reserve Bank.

6. UNACCOUNTED FOR INVOICES

When the accountal of goods traffic was on inward basis, in a comparison of outward and inward
Abstracts, some invoices were deleted which were either not accounted for in Inward or Outward
Abstract.

Such items were abstracted on a register to watch their accountal in subsequent months. With
the introduction of mechanized procedure on outward basis the invoices are brought to the Accounts
office by couriers and machine prepared abstract are made. Machine prepared Abstracts are compared
with the Inward delivery book. No unaccounted for invoice is allowed to exist.

7. ACCOUNTS OFFICE BALANCE SHEET

It is a statement prepared in the Accounts office for taking the Carriage Bills(prepared in
connection with Credit Notes etc.) tendered at stations in lieu of cash into account and watching their
realization from the parties concerned as well as for incorporation into accounts. The traffic cash received
otherwise than through station Balance Sheets (Eg: workshop profits, advertisements fees, sale of grass
coupons sold by the Tourist agents, suburban tickets sold in the head quarters.

This Balance Sheet corresponds to Bills Receivable account in the commercial book keeping and
is kept in the for A-2923, separately for coaching and goods traffic.

8. CUSTODY STORES
Stores chiefly consisting of items purchased for the Mechanical Department for the construction
of Rolling Stock sanctioned under capital or Revenue programme are known as “Custody Stores”. Cost of
these stores, is straight away depicted to the works concerned but are kept under the safe custody of
stores department. With the sole idea that these stores may not be lying unnecessarily in the workshops
but may remain with depot officer where there is proper arrangement for custody until these are
required.

9. APPROPRIATION BILL
After the Demands for Grants are voted by the parliament approval of parliament to the
withdrawal of the amounts so voted from Consolidate Fund of India is sought through the Appropriation
bill.
Under Article 114(3) of the Constitution of India, no amount can be withdrawn from the
consolidated fund without such as Appropriation act passed by parliament.

The process of detailed consideration of the demands for grants is expected to be completed and
Appropriation Bill passed before the commencement of the Budget year.

6 Short Notes for Appendix III - A

10. APPROXIMATE ACCOUNT CURRENT:
A Statement of receipts and expenditure for each month and from the commencement of the
financial year to the end of the month under such heads, as may be prescribed, is sent to the Rly. Board in
th
Form Appendix – XV, so as to reach them not later that the 15 of the month following that to which the
th rd
figures relates (20 jan and 3 may ) in the case of Approximate Account Current for December and
March respectively or by any other dates as may be prescribed by the board.

The information should be posted by Air Mail by name to the Office In-charge of the Accounts
Branch of the Board’s Office if in any case the statements cannot be sent on the due date by post, the
information contained therein is telegraphed to the Railway Board.

The approximate account current is accompanied by the following statements

1.Statements comparing the approximate gross receipts and revenue expenditure with the actuals of the
corresponding period of the previous year together with brief explanation for the variations.

2. Statement showing approximate receipts disbursement.

3.Credits booked in reduction of expenditure under Capital and Revenue by Demands.

The approximate account current received from the various railways are consolidated in the
accounts branch of the railway board and one approximate account is for the railway ministry. This
account current is accompanied by the consolidated statement expenditure in ENGLAND is sent to the
finance ministry for use in the consideration of ways and means of the central government and a copy
there of sent to the budget branch, Rly. Board. From the statement of Gross receipts and revenue and
expenditure in ENGLAND received from the various railways, a consolidated statement of the entire
railway ministry is prepared and sent to budget branch to enable them to watch the progress of revenue
and expenditure against the sanctioned budge.

11. PROFORMA ON COST

The term ‘Proforma On Cost’ commonly known as Indirect charges as intended to include all on costs
which are not included in the cost of work done in Railway Work shop, but which are not included in
commercial costing.

This consist of charges, charged off direct to final heads of working expenses such as general
administration and depreciation or of charges not included in the working expenses of the railway.

The expenditure included in the pro-forma on cost are as under

1) Supervision
2) PF contribution, S.C. to P.F and Gratuity of workshop staff
3) Contribution to SBF
4) Repairs and Maintenance
5) Interest and Depreciation
6) Expenditure on New Minor Works

7 Short Notes for Appendix III - A

12. URGENCY CERTIFICATE

Some times the works are considered to be urgently necessary to safe guard life or property or to
repair damage to the line caused by flood, accident or other unforeseen contingency so as to restore or
maintain through communication. In such cases, the Railway administration cannot afford to observe the
normal procedure of

i) Preparation of Estimates
ii) Verification and sanction there of by the competent authority
iii) Allotment of necessary funds before undertaking the work

The executive engineers are vested with powers to authorize the commencement of such
emergent works before sanction of the detailed estimate and allotment of the necessary funds by
competent authorities. They are however required to submit report at once through proper channel to
the authority competent to accord administrative approval to the work and to allot the requisite funds.
This report is called Urgency certificate.

13. CASH IN TRANSIT

Station take credit in their balance sheets for cash realized by them in the month irrespective
whether it is remitted to and acknowledged by the cashier in that month or in subsequent month. Such
station cash for which credit has been allowed to the stations in one month but which has been received
and included in general books in the following month is called ‘Cash in Transit’.

However, the Railway Board vide their lr. No. 56AC/9/II/2A dated 30-06-1956 have decided that
the cashiers books should be kept open for three days after the close of the month to accommodate the
cash collected in the month but shroffed in the cash office in the following month. So there should
normally be no amount under head ‘Cash in Transit’.

14. WAYS AND MEANS

Aim at arranging that the cash balances of the government shall at all times during the year be
sufficient to meet the requirements. “Ways and Means” deal with Government revenue expenditure
proper but also with all receipt and disbursements which enter and leave the treasuries and affect the
Government cash balances.

A forecast is prepared for the opening balances of the year and monthly incoming and outgoings
of all kinds pertaining to Government and it is arranged by adjusting one to other by raising a loan or
reducing amount of expenditure etc., that the estimated Govt. cash balances as a whole shall never below
a level during a year.

For this, careful watch is kept by review of Ways and Means actions Vis-à-vis Actual progress of
expenditure.

15. MATERIAL AT SITE ACCOUNT

The stocks of certain classes of stores required by the railways have often to be held by the users
at the place of work.

8 Short Notes for Appendix III - A

 1) To avoid piece meal requisitioning of stores from the stores department.
2) For use in emergencies to avoid delay and detentions in transportation and
3) In some cases, in consideration of the special nature of the material stocked and transportation
of such material as
a) Permanent way or other engineering materials in the custody of PWI/IOW
b) Locomotives, Carriages Wagon parts and electrical stores in running sheds, Train
Examining stations, outdoor electrical chargeman.
c) Stores in workshops waiting to be used in repairs or manufacture of locomotives,
carriages and wagons duplicates
d) Stores which have been purchased for special works and charged to such works but (i)
left in the custody of stores department(CUSTODY STORES) (ii) Lying at the site of work
(Material at Site)

A separate account is maintained for the material-at-site account. It should be maintained in the
Form-1441. Quarterly and half yearly returns for each station are to be sent to the DRM for prescribed
amounts.

16. STORES IN TRANSIT

The term Stores in Transit literally means that the materials dispatched has not been received at
destination and is still in transit.

Whether the stores issued during a month from a depot are not received in the receiving depot
in the same month such items would not appear in the accounts of the receiving depot. The summaries
of issues sent by the issuing depot, the dates of accountal in the price ledger cannot be marked against
such items. At the close of the month such unaccounted for items in the summaries of issues, are posted
in a register called the “Register of Stores in Transit” and then the items are received and accounted at a
later date, the credit is posted under the column for the month, in which accounted against the relevant
debit entry already posted there in.

Separate Registers are maintained for each depot and the balances lying are carefully analysed
each month taking action with the depot officer concerned for items outstanding for more than a month.
Special lists of items outstanding for more than three months are sent to the COS for taking steps for the
clearance.

In the same way as under “Depot Transfer”, there may be stores-in-transit under the purchases
also where inspection and receipt work is centralized. The credit to purchases is noted from the receipt
note quoted by such inspection section while the contra debit appears only when the receiving depots
accounts for it is in its ledgers.

IT may be that the materials do not reach the receiving depot in the same month. In such cases,
after completion of posting in priced ledgers, all outstanding items in the summary of credits to purchases
are posted in a “Stores in Transit” registers to be maintained for purchases separately and the items
pursued for clearance.

A statement is prepared each month from each stores-in-transit register and closing balance
reconciled first with the outstanding balance for the month, in the stores-in-transit register and later with
the general books.

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17. MEMO INVOICE

It is an invoice prepared from the particulars available on the wagon labels, code Marks,
guidance etc., in the absence of through invoice, transit invoice or railway receipt.

It is accounted for in the abstracts and submitted to the accounts office. A copy of the original
received from the forwarding station is sent to the accounts office with the remarks “Accounted for in PE
through memo Invoice”. Separate pages are reserved for recording memo deliveries.

18. OPEN LINE WORKS REVENUE

It is one of Heads of distributing Railway expenditure or allocation of expenditure. Open Line

Works Revenue bears :

1) The cost of all works falling under the limit of New Minor works including those of staff
amenities and staff quarters costing not more than Rs. One lakh in each case.
2) The cost of unremunerative operating improvements costing not more than ten lakh in each
case.
3) The cost of such replacements and renewals are not chargeable to D.R.F or capital of D.F
4) The cost of dismantling, handling and shifting including profit of stores depot, in respect of work
under items 1,2 and 3 above.
5) Investment in share capital of railway men cooperative stores upto 2500 per society.

Credits : This head is credited with the amount realized from the disposal of an asset without being
replaced on the debit of OLWR and also from the released materials in the case of replacement of an
asset at the cost of OLWR.

19. WORKHOP GENERAL REGISTER

The labour and stores sub-ledgers having been totaled, the totals of (a) the labour charges and
(b) Stores and Misc. charges for the month relating to each work order should be transferred to workshop
general register and posted under the relevant work orders shop by shop care being taken to see that no
items are left out in posting.

In order to check the correctness of the posting in the WGR, a summary of all sub ledgers is
prepared in Form W-1662 and amounts reconciled with that appearing in WGR.

The WGRs should be revised monthly to see that all works shown there in are correct.

20. OBJECTIONABLE EXPENDITURE

On open lines of Railways, all objectionable items noticed in the internal check of bills or
documents regarding work are communicated through the offices concerned through this allowance lists
and objection statements. Irregular or objectionable expenditure which comes to notice, after the
posting in the register of works and allocation registers and totaled up and reconciled with the general
books, are also intimated to the offices responsible for the outlay for expeditious regularization.

10 Short Notes for Appendix III - A

 Objectionable Expenditure is classified as under :

1) Want of sanctioned estimate

2) Excess over sanctioned estimate
3) Want of sanctioned appropriation
4) Miscellaneous for example Irregular personal claims, absence of vouchers, breach of financial
rules, provisional acceptance of allocation of estimate and provisional payment to staff of any
account.

It is the duty of the Accounts office to take all necessary action without avoidable delay to secure
regularization of all expenditure placed under objection. The Accounts office should if necessary send
extracts from objection book to executive officers and ask them in writing to intimate the action taken in
each case. The outstanding items are discussed in the Divisional Officers Meetings at the Divisional level
and in the Principle Officers Meeting at HQ level and objections are persued till they are cleared or
finalized.

21. TRANSFER TRANSACTIONS - INTER RAILWAY & INTRA RAILWAY:

All transactions between two separate accounting units within the same railway or between two
railways within the same system of accounts i.e. of Railway department should be settled by book
adjustment. These transactions should be passed on to the party concerned through transfer certificate –
Local/Foreign. Local TCs or Advice of transactions pertain to the division or branches of home railway.
Local TCs are issued by and are received direct in the respective accounting units.

Foreign TCs are dealt with in HQrs office books section. Relevant Bills/Vouchers are sent with the
TCs by the accounting unit showing allocation against which the amount is to be adjusted. Transfer
transactions between two units of the same railway are known as Intra Railway TCs while transfer
transactions between two railway zones are known as Intra-Railway TCs

22. CASH REMITTANCE NOTE

The earnings of stations are remitted through(always accompanied by cash) remittance

note(C.O.M/C.O.9 Revised) to the cash office. This is prepared in three foils – one block and two counter
foils.

The counter foils are sent along with cash to the cashier who returns one foil duly signed by the
cashier and cash witness to the station as an acknowledgement, the other being passed on to the
accounts office.

Details of vouchers (warrants, credit notes, pay orders etc) are given on the back of the cash
remittance note.

The station takes credit in its balance sheet on the basis of cash acknowledgement as per CR
notes for the month.

23. NON-ISSUED TICKETS

When a passenger before commencing his journey wishes to change his ticket for one of a higher
class of for a more distant station or for a return journey ticket and pays the difference of fares or when a

11 Short Notes for Appendix III - A

 wrong ticket is issued or when it becomes necessary to take back a ticket which has been issued and to
refund the fare or when it becomes necessary to cancel and card or paper ticket of any description, the
original ticket should be marked non-issued and initialed by station master(booking clerk) in a sealed
cover with a non-issued ticket statement.

If it is not sent the persons responsible should be debited with the value of the ticket or some
other disciplinary action may be taken against him.

In the accounts office the Non-issued tickets summary is subjected to critical check.

24. HANDLING BILLS

When either the S.M. or contractor perform the loading or un-loading services on behalf of the
railway, they prepare handling bills.

Consignments handled by consignor/consignees are entered in this statement of ‘Goods not

lifted by contractors’ appended to each bill. Such bills are prepared for local and foreign traffic and bear
the counter signatures of Divisional Traffic Superintendent(Now actually those bills are based on weight
not lifted by owners and agencies other than the handling contractors as per machine prepared abstracts
and paid statements)

25. GOODS CASH BOOK

The goods cash book is a record of

1. The progress made in the realization of goods earnings from all sources, including demurrage,
wharfage and special receipts which are shown under the head “miscellaneous” in the goods balance
sheet.
2. The remittances of such receipts to the accounts office.

It is posted as cash and credit notes are received and opposite the total of each day’s receipts the
following entry is made “Remitted to cashiers under Cash Remittance Note No……………..dated
………………..

When the payment of freight is made, the foils of the outward or inward book on which the
items appear is inserted against the entry in the Goods Cash Book.

It is the most important record to check the accuracy of goods transaction taking place at the
station.

26. GENERAL ON-COST

It denotes all on cost other than the proforma on cost that is incurred in common with more than
one shop or department within the workshop. The General on cost includes:

1. Leave, Sick, Hurt and holiday pay paid to workshop employees whose wages are not charged to shop
such as yard establishment.
2. Wages, overtime etc. of staff such as workshop apprentices, tool keepers not attached to shops.
3. Freight charges which cannot be directly charged to jobs.

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 4. Electrical power which is not possible to allocated to shops.
5. Hydraulic and pneumatic power and gas that cannot be allocated to shops.
6. Wages paid in lieu of notice to workshop staff not charged to shop.
7. Replacement of articles stolen or lost.
8. Expenditure on apprentices, school and hostel.
9. Cost of Railway security Force staff which is specially employed to safe guard the premises of more
than one shop or for the whole workshop under a responsible officer.
10. Working expenses of cranes and shunting engines, lorries, auto-trucks etc. provided for the use of the
workshop when not chargeable to shop on cost.
11. Working expenses of central works pumping plant.
12. Experimental work, when more appropriately charged direct to job itself.
13. Wages charges that cannot be allowed to shops.
14. Wages, over time etc of general labour in yards and shunters.
15. Sanitary arrangements in workshops
16. Messengers, wages, uniform etc when allocated to shops
17. Consumable stores for general use not allocable to shop.
18. Maintenance of mess room.
19. Yard lighting.

27. MACHINE PRINTED ABSTRACTS

th
The Traffic Accounts offices will send to each station, through commercial couriers by 12 of the
following month, Machine Printed Abstracts also called Machine Prepared Abstracts(in duplicate)
separately for paid and To-pay traffic in the Pro-forma appearing at Appendix – XX/X of I.R.C.M.

All invoices booked to the Station from all stations on the Government Railways during the
th
month will be listed in these abstracts. If these abstracts are not received at the station by 16 of the
following month, S.M should call for the same telegraphically from the Traffic Accounts office concerned,
docketing a copy of Telegram to the Divisional Commercial Manager.
th
If M.P.As are not received at the station by the 20 of the following month, the goods delivery
book should be closed and balance sheet compiled on that basis, when M.P.As are subsequently received
they should be compared with goods delivery book. Any further amount required to be taken to debit as
a result of this comparison should be adjusted in the balance sheet in hand under the head “ Difference
for previous month between delivery book and MPA” (Para s 2020 : 21 IRCM)

28. STOCK SHEET

The Stock Verifier should daily prepare stock verification sheets(S-1260) for all items of stores,
the verification of which has been completed that day.

The Stock Verification Sheets should be prepared from the data in the field book after filling in all
columns of the Sheets and after all copies have been initialed by the ward keeper, the original copies
should be submitted to the Stores Accounts Officer for posting the Priced Ledger and duplicate and
triplicate made over to the ward keeper. A manuscript Register of Movement of such stock sheets should
be kept as a record of such dispatches.

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 Stock sheets for stores depot verification should be serially numbered for each class stores and in
the case of other verification for each account separate series being also used for new, second hand and
surplus stores. In cases where there are no discrepancies in stock, no stack verification sheet need be
prepared.

29. RAILWAY CONVENTION COMMITTEE

Recommendations of Acworth Committee (1920-21) which was formed to examine the question
of separation of Railway Finances from General Finances. With a view to ensure that the Railway should
have a separate budget of their own, and become responsible for their earnings and expenditure. It was
also suggested that the Railways should provide such net revenue as is required to meet the interest on
the debit incurred by the Central Government for Railways.

The control over financial transactions of the Railways was to continue as before and was to be
exercised as rigidly as on financial transactions of other Governmental Departments.

The salient features of recommendations are :

1. Whereas arrangements for financing of all departments had been considered together the Railways
were to remain a part in future in respect of both capital and revenue expenditure.
2. There should be definite programme of Railways for capital expenditure and a definite borrowing for
railway purposes.
3. Net profit earned by the Railways should be distinct from the General Revenues and should be
utilized for creating additional facilities or reducing rates and fares.
4. The committee also suggested for establishment of Depreciation Reserve Fund on the Railways.
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Separation Conventions was adopted by a resolution of the Legislature on 20 September 1924.

Main features of Separation Convention are

1. Annual Railway Contribution to the General finances of the Government in the form of Dividend on
the Loan Capital.
2. Loss on Strategic lines: The interest on the Capital at charge and loss in working of strategic lines will
be borne by general revenues and will be deducted from the dividend payable.
3. Revenue Reserve Fund: Any surplus remaining after payment of Dividend will be transferred to
Railway Reserve Fund. If the amount available exceeds 3 crores only two thirds of this will be
transferred to the fund and remaining one third will go to the general revenues. The Revenue
Reserve Fund has been abolished w.e.f 1992-93. The amount has been transferred to Development
Fund.
4. Objects of Revenue Reserve Fund: It should be used to secure to payment of dividend, to provide
arrears of depreciation and writing down loan capital and strengthen Financial position of Railways, in
order that the services rendered to the public could be improved and rates reduced.
5. Temporary Borrowings : The Railways can borrow temporarily from the general revenues to meet
capital expenditure.
6. Railway Standing Committee of Legislature : It consisted of nominated chairman and eleven members
from the legislative assembly from their body to examine the estimates of Railway expenditure
which the Railway Board had to place before the Committee prior to discussion on demands for
grants for Railways in the Assembly.

14 Short Notes for Appendix III - A

 7. Railway Depreciation Reserve Fund : This fund was created to meet the cost of replacements and
renewals.
8. Demands for Grants : The review of The Railway Separate Convention Committee continued to be
conducted after every 5 years and various changes introduced to fit with the changed circumstances.

The Railway Budget was to be presented to the Legislative Assembly in advance of the General
Budget in the form of Demands for Grants.

Objectives of Separate Convention:

a. To relieve the Central Budget from the violent fluctuations caused by the incorporation
there in of the Railway Estimates of Income and expenditure.
b. To enable Railways to carry out a continuous policy based on necessity of making a definite
return to General revenue on the sum spent by Government on Railways.

The term of R.C.C. have been changing from period to period as a result of recommendations of
various committees set up for the purpose.

30. WAGON TURN ROUND

It is a statistical term. It is the measure of utilization of a wagon in one complete trip and is
committed from the time the wagon starts with a load, till it is ready to pick up another load from the
same destination or some other station. The quicker the round, the better the working results.

The better wagon Turns Round depends on various physical characteristics of land traversed
offering of traffic at the destination point and density of traffic and economic development and
dependence of the area and also general lead or average haul of traffic.

31. JOINING TIME

It is the time granted to a Railway Servant to enable him to join a new post on transfer. The time
is regulated according to distance of the new place from the original place of duty.

The joining time shall be calculated from old Head Quarters in all cases.

On transfer from one station to another and also involving change of residence.

Distance between old HQ & new HQ Joining time admissible

1000KM or less 10 days

More than 1000KM but less than 2000KM 12 days

More than 2000KM 15 days (except in cases of travelling by air

for which the maximum will be 12 days)

The joining time is admissible only in cases of transfer in public interest and not in cases of
transfer on employee’s request

15 Short Notes for Appendix III - A

 When a railway servant joins the new post without availing of the full joining time, the number of
days joining time as admissible under the rules, subject to a maximum of 15 days, reduced by the number
of days actually availed of shall be credited to his leave account as earned leave/LAP.

32. PUBLIC ACCOUNTS COMMITTEE

At the commencement of each session, a Standing Committee of Parliament is constituted for

the purpose of scrutinizing the Appropriation Accounts and audit reports there on, and such other
matters as the Finance Department may refer to it.

As a Parliamentary Committee appointed by the Speaker of Lok Sabha, consisting of members

from both Houses of Parliament. The Public Accounts Committee has its own chairman, its own
programme and Procedure. The committee takes up the examination of the Audit Report and
Appropriation Accounts after they have been placed before the parliament with the approval of the
President.

Apart from taking oral evidence from Government representatives, the Committee calls for
additional information in the form of Memoranda and notes on points on which it requires further
elucidation.

The committees findings are recorded in a report presented to Parliament. Even though the
Committee is not an executive body and its opinions and findings are only recommendatory and
mandatory. Government examines each recommendation with a view to implement them and report on
the action taken when the next year’s accounts come up for examination.

33. OPERATING RATIO

Operating ratio is the ratio of working expenses to gross earnings. It is a measure of gauging the
operating efficiency. However in actual practice it is not always a good criterion of relative operating
efficiency of different Railways where working conditions vary widely and this is particularly so in India
due to differences in climate, topography, industrial, commercial and agricultural activities.

Similarly while comparing ratio of one year with another great care is taken to see that the terms
‘working expenses’ and ‘gross earnings’ are clearly defined and that the figures have been compiled on
the same basis. The object of a Railway administration is to keep this ratio as low as possible, consistent
with efficient working increase in traffic and fall in expenditure.

Working expenses including D.R.F x 100

Formula: Operating Ratio = --------------------------------------------------------
Gross earnings

34. INFLATED MILEAGE

Inflated Mileages are two times, three times, four times, one and half times etc. of the actual
distance. In sandy, hilly and rainy parts of the country where the operating cost is more than what in the
plains, the distance will bring the margin of profit after meeting average cost of service.

16 Short Notes for Appendix III - A

35. TRANSFER GRANT AND PACKAGE ALLOWANCE

Transfers means the movement of an employee from one Head Quarters station in which he is
employed to another such station, either to take up the duties of a new post or in consequence of a
change of head quarters.

Daily allowance, mileage allowance for journeys between residence/railway stations at either
end and lumpsum transfer grant and packing allowance presently admissible on transfer are replaced by
composite transfer grant w.e.f 01.10.1997.

The daily allowance for the period of journeys on transfer and road mileage allowance for self
and family between the residence and the railway shall no longer be admissible now. These concessions
will instead be subsumed in the Composite Transfer Grant.

Railway servants who have joined railway service on or after 01.05.1976 will be entitled to CTG at
the rate of one months basic pay in the case of transfers located at a distance of 20KM or more from the
HQ to the outstation involving change of residence.

Transfer allowance for short distance transfers, the road mileage allowance admissible for self
and family members will not be admissible w.e.f. 01.10.97.

In the case of transfers to outstations which are within a distance of 20kms from the HQ or
transfers within the same city/urban agglomeration the CTG at the rate of one third of one month’s basic
pay will be admissible.

In the case of employees who joined railway service prior to 01-05-1976 and are entitled to
liberal scale of transportation of personal effects by rail, in terms of railway servant(pass) Rules, 1986, the
quantum of CTG will be 80% of basic pay in the case of railway employees in group ‘A’, ‘B’,’C’ and 90% in
the case of group D.

The CTG now admissible for transfers within the same city/Urban agglomeration/short distance
transfers within the distance of 20Kms shall however be admissible at the full rate of one third of basic
pay in the case of railway employees who joined service prior to 01-05-1976.

In the case of retired employees, w.e.f. 01-10-1997, the lump sum transfer grant and packing
allowance are substituted by CTG. Daily allowance & road mileage allowance hitherto payable for self and
family members will be subsumed in the CTG and will not be admissible separately.

36. PRODUCTIVITY TEST

For the purpose of applying productivity tests to open line works ender taken with the definite
object of increasing earnings or reducing expenditure and to which such tests can be applied within 5 to
7years of their completion, selection will be made out of these works(charged to capital) on grounds of
remunerativeness. All such works costing Rs.50 lakhs and over will invariably be subjected to this test.
The result of the Test should be reported by G.M. to the Railway Board.
th th
The actual net cash flow of each year to end of 5 /7 year from the date of commissioning
should be recorded for each open line work to be subjected to this test and the cash flows for the rest of
the project life assessed on the basis of the latest estimate. The whole series of net cash flows should
then be discounted to arrive at the rate of return compared to return originally expected.

17 Short Notes for Appendix III - A

 In addition to the Productivity Test to be conducted a productivity review should also be
undertaken in respect of selected works costing over 10 lakhs which are estimated to fetch some return,
even though not the return prescribed for a work being classified as renumerative and as such charged to
OLWR or DF.

The methodology to be followed will be the same as prescribed in respect of works costing over
one crore each. In case of such works being sanctioned by G.M within his own power of sanction,
selection for the purpose of Productivity review will be made by him in consultation with FA&CAO. The
selection made by the Railway Board out of such works sanctioned by them will be notified through
letters conveying sanction to the estimates for such works.

For works costing over 10 lakhs but up to one crore each sanctioned by G.M. within his own
powers of sanction for the purpose of Productivity review will be made by him in consultation with
FA&CAO of his Railway(Para 248 & 249 of F-1)

37. INKED ENTRIES

When MPA are sent to destination station for verification with Delivery Book, on verification it is
noticed that item appearing in Delivery Book is not available in MPA, the entry is written the MPA which is
called Inked Entry. If the item appearing in the MPA is not available in the delivery book, this is forced in
the Delivery Book which is called forced entry.

38. ESTIMATE COMMITTEE

There is a Parliamentary Committee on Estimates for examination of such of the estimates as my

deem fit to the committee or are specially referred to it by the Parliament or the Speaker.

Members of Committee are appointed by the Speaker of Lok Sabha from both Houses of
Parliament. The functions of the Committee are

a) To report that economies, improvements in organization efficiency or administrative reform,

consistent with the policy underlying the estimates may be effected.
b) To suggest alternative policies in order to bring about efficiency or economy in administration.
c) To examine whether the money is well laid out within the limits of the Policy implied n the
estimates.
d) To suggest the form in which the estimates shall be presented to the Parliament.

The Committee consists of not more than thirty members to be elected by the Lok Sabha every year
from amongst its members according to the Principle of Proportional Representation by means of single
transferable vote, provided that a Minister shall not be elected as member of the Committee and that if a
member, if after his election to the committee is appointed as Minister, he shall cease to be member to
the Committee from the date of such appointment.

The term of the office of members shall not exceed one year.

The Committee may continue the examination of the estimate from time to time throughout the
financial year and report to the House as its examination proceeds. It shall not be incumbent on the
Committee to examine the entire estimates of any one year.

18 Short Notes for Appendix III - A

 The demands for grants may be finally voted notwithstanding the fact that the Committee has
made no report.

39. PNR NUMBER

This is the Special number which is given on the Ticket issued under Computer service. This is
referred to in all cases of refund, over charges, irregular service. A register is maintained at station to
record all such tickets under computerization service.

40. RONEOED LISTS

Stations are supplied with Roneoed lists by Traffic Accounts office showing “Index
Number”,”Station to”, “rate” and Index numbers for each series of printed tickets stocked at the stations
in respect of Traffic over Government Railways.

Each series of printed tickets supplied to a station, for traffic over Government Railways is
allotted by Traffic Accounts office a serial number called ‘Index Number’. This is for the purpose of
identifying the printed series in D.T.C. cum Summary Book, Local, Through Passengers classification of
printed Tickets daily/monthly statements of Non-Issued tickets and ticket indents. The particular Index
number in relation to particular station from identities one and only one particular printed series stocked
at the station from.

In case of continued class ticket the code to be used is one applicable to the class of first leg of
the journey(para 702 of IRCM)

41. IDLE TIME

The time taken up in delays and hold ups due to break down of service or plant or any other
causes for which the piece worker cannot be held responsible should be booked to “Idle Time” and not to
the job and all time so booked should be carefully investigated. Responsibility for the delay or Break
Down located and such steps as may be considered desirable, taken to prevent such waste. Railway
administration can fix the limits of Idle time that can be ignored i.e. booked to the job.

42. DEPOT TRANSFER

Depot Transfer of stores are made from main Depots, to subsidiary Depots when latter’s balance
fall below the minimum limit. Such transfers are done on Depot Transfer Issue Notes. Form prepared in
four foils

1. Office copy
2. Second and third copy to be sent to receiving depot.
3. Fourth to the Ledger Section from where it is sent to Stores Accounts office after postingin
Numerical Ledger. Daily summaries of Depot Transfers issue Notes are sent to the Stores
Accounts Office.

43. JOB CARDS AND PLUS CARDS

Job cards are printed separately by the Production Control Organisation for each operation
indicated in the Route Card. When the job is taken up by the operator he punches ‘On’ and on finishing

19 Short Notes for Appendix III - A

 the job ‘Off’. Thus the job card gives the total time taken for the job. On completion of the operation, the
job card is passed on to the Incentive Bonus Section of the Workshop Accounts Office.

The Plus cards are issued to authorize additional time needed for the jobs arising out of
brittleness of the materials used, additional operations, machine performance, etc. which are not
anticipated and provided for in the “Time allowed for Operation”.

44. FREIGHT DEPOSIT SYSTEM

Under this system about one month or one and half month freight amount is deposited at the
Station and booking is carried out under this deposit. If the deposit is not sufficient to cover month’s
transactions it is increased as per CC orders. This facility is granted to a well up and reliable party.

NEW SERVICE

The constitution of India provides that when a need has arisen during current financial year for
incurring expenditure upon same “New Service” not contemplated in the Annual financial statement
(i.e.Budget) a statement should be placed before both the Houses of Parliament for the estimated
amount of expenditure. The Constitution does not define what is a “New Service” and only a sase law
settles the New Service.

However, in the light of the decision taken by CAG and the Public Accounts Committee the term
“New Service” can be understood as an expenditure arising out of a new policy decision not contemplated
at the time of Budget. This may include new activity, or a new form of investment.

Some examples of New Service are

i) Investments in Private sector companies to be made for the first time.

ii) Additional grant in aid to private institutions exceeding Rs.10 lakhs
iii) Additional investment of more than Rs. One Crore in an existing departmental
undertaking.
iv) Setting up of Commissions of enquiry, if the expenditure is likely to exceed Rs. 4lakhs.
v) Setting up a New Government company.

45. STATION TO STATION RATES

The quotation of station to station rates largely depends on commercial considerations. The
reduction in the rates notified in the goods traffic and quotation of special rates is attempted with a view
to retain the existing traffic and attract the additional traffic.

The rates quoted however, should cover the incremental costs,that is the additional cost to be
incurred by the Railway for moving the additional traffic.

The proposals for the reduction in station to station rates should be initiated by the Railway on
which the traffic originates.

The rates should be fixed in consultation with “The Associate Finance”. In case the station to
station rates involves more than one Railway, the concerned railways over which the traffic should be
intimated of the reduced rates.

20 Short Notes for Appendix III - A

46. DIVIDEND RELIEFS

The Railway Convention Committee, 1989 have endorsed the following reliefs on the Dividend
Payable to General Reviews :

i) In respect of the Capital invested on New lines , the Dividend Payable is to be calculated
at the average borrowing rate for each year, but deferred during the period of
construction, and the first five years after opening of the line for traffic.
ii) The deferred liability is to be paid out of the future surpluses of the line after the
payment of current dividend.
iii) The amount of unliquidated deferred dividend liability on New Lines, is to be closed for
a period of 20 years from the date of their opening.
iv) Short fall in the payment of dividend on account of inadequacy of Net Revenue is
treated as a deferred liability on which no interest is charged.

47. LATE TENDERS:

Late Tenders are the Tenders received after the specified time of opening of the Tenders. Such
Tenders should be opened by the concerned branch officers and marked distinctly, preferably in red ink
prominently on the envelop as well as on the Tender papers. A suitable remark should also be made in
the Tender Register as well as in the Comparative statement.

Normally, all Late Tenders have to be totally rejected. However, in exceptional circumstances, if
the late tenders received from the Public sector firms, established and reliable suppliers confirming
substantial financial advantage to the Railway. It is open to the Railway Administration to seek Railway
Board/s approval for the consideration of such late tenders.

48. RUNNING ALLOWANCE

Running Allowance means the ordinarily granted to Non-Gazetted railway employees for the
performance of duty directly connected with the charge of moving trains and includes kilometerage
allowance and mileage allowance and allowance in lieu of mileage but excluded special compensatory
allowance.

These allowances are granted to Running staff i.e. Driver, Motor Man, Shunters, fireman, guards
and brakemen.

Running allowance is paid on mileage basis, the amount of mileage earned will be calculated as
prescribed rates per 100 Kms. When running staff is on non running duty while at Head Quarters, it will
be paid at 30% of pay.

49. RAILWAY TRAFFIC ENQUIRY COMMITTEE

The Government of India, appointed the “Railway Traffic Enquiry Committee” to examine the
structure of the fare, rates and charges for Public Tariff carried by Passenger and Goods trains.

The terms of references included the packing condition, booking, delivery and payments.

The Committee was also asked to look into the aspects of developing economy, importance of
making railways financially viable and the possibility of increasing operating efficiency of Railways.

The committee submitted its report on 01-04-1980. The present rate structure is based on the
recommendations of this Committee.

21 Short Notes for Appendix III - A

50. LAST IN, FIRST OUT

The accountal of stores consumed in the production process under the method ‘Last in First out’
will enable the organization to charge the latest market prices of stores to the production costs.

Under this method, the rate per unit of material will be priced at the latest procurement invoice
price.

51. SUPPPLEMENTARY DEMAND

When the amount of Grant/Appropriation in the budget is found to be insufficient for the
purpose of the current year, an estimate for the supplementary grant/appropriation is submitted by
Railway Board to the vote of the Parliament/Sanction of President in the same way as the original demand
for grant has been obtained.

An excess demand relate to expenditure already incurred for the reasons to be fully explained, in
excess of money voted by Parliament to meet the expenditure during a year.

The excess demand is based on the recommendation of the Public Account s Committee as a
result of their scrutiny of the Appropriation Account of the Railway. Excess demands have to be
presented after obtaining the recommendations of President.

52. DEMANDS FOR GRANTS

Railway proposals to meet the expenditure are submitted for the vote of Parliament are made in
the form of Demands for Grants.

After the vote of Parliament is obtained, the same very Demands are known as Grants authorized
for insuring expenditure. The Railway proposals are submitted in 16 Demands

DEMAND NO. DEALS WITH

01 & 02 Railway Board

03 General Superintendence & Services on Railways.
04 to 07 Repairs & maintenance
08-10 Operating Expenses
11-13 Staff welfare, Retirement Benefits and Misc.
14 & 15 Railway funds and payment to general revenue
16 Works Expenditure.

53. INCENTIVE

The salient features of incentive scheme are

1) Under the incentive scheme basic wages of all workers are guaranteed irrespective of their
results of incentive Bonus, but losses during any particular are adjustable against the profit of the
same month.

2) The ceiling limit on the profit is fixed 50 % in respect of each job year to year by the Railway
Board.

22 Short Notes for Appendix III - A

 3) Supervisors up to the levels of chargemen and essential indirect workers are permitted to
participate in the incentive scheme. Their earnings are however, restricted to a fixed prescribed
limit of average percentage of profit earned by direct to direct workers supervised by them.
4) A monthly statement of essential direct workers is supplied by shop-in-charge to incentive bonus
section of Accounts Department.
5) Apprentices and Time Office Staff are not allowed to participate in the scheme.
6) No workers under Incentive scheme will be booked for over time during the same period.
7) The incentive workers are classified as Direct, Essentially Direct and Indirect workers.

54. ERROR SHEET

When a mistake involving financial loss is noticed, the amount short collected of unaccounted is
debited to the station responsible by means of an error sheet.

This is prepared in carbon in triplicate. The original is kept as office record and other two copies
are sent to station against which debit is raised. Where separate outstanding branch of CCS’s office is
available, error sheet is prepared in 04 copies and the fourth copy is sent to CCM.

The clearance of the debit is watched through the Rules in force by FA&CAO of the Railway
concerned.

55. UNDER CHARGED STATEMENT

When under charges are detected by and recovered at the receiving station in respect of pre
paid traffic. These stations take debit for under charged amounts, and account of such under charges in
return(statement)submitted to Accounts office taking the special debit in the Monthly Balance Sheet in
hand.

Particulars of such charges relating to through Traffic should be advised by the receiving Railway
Accounts Office to the forwarding Railway Accounts office to enable the latter to withdraw the debit if
any.

56. RAILWAY CLAIMS TRIBUNAL

Railway Claims Tribunal has been brought into being under Railway Claims Tribunal Act, 1987(54
of 1987) w.e.f. 08-11-1989.

The Act sets up a Claim Tribunal with benches in different parts of the country to expedite
disputes regarding loss, destruction, damage, non-delivery or deterioration of goods, or animals entrusted
to the Railway Administration for carriage, death or injury or loss etc. to a passenger in a Railway accident
involving a passenger train and refunds of fare and freight charges, ousting the jurisdiction of civil court
and claims commission etc.

57. LINE CAPACITY

The term Line Capacity is generally used for works after the execution of which the capacity of a
Line or section there of is increased to accommodate the movement of more traffic.

Line Capacity works fall into two categories

i) To avoid detention of stocks

ii) To carry additional traffic

23 Short Notes for Appendix III - A

 Various methods are used to increase Line Capacity

a) Conversion of gauge from M.G. to B.G.

b) Doubling of Line
c) Signaling improvement
d) By introducing Centralized Traffic Control System
e) Lengthening loops
f) Crossing to be increased etc.

58. BIN CARDS

Material stored in Stores depot are distributed amongst the different wards. Each ward
containing material of one or more classes of stores.

In wards a system of stocking the Stores. So many deep row in a layer of stores is adopted to
ascertain at a glance the existing stock at a time. In respect of small items a system of packing in bags
uniform quantities of items in convenient weights or number based on average quantities for one issue is
adopted and kept in separate bins.

Wherever practical gradation marks are printed on bins or separate cards known as bin cards are
maintained to show certain preciously held quantities which would enable a busy ward keeper to know at
a glance the approximate stock in his custody and assist him in taking steps for prompt recoupment.

59. STATION OUTSTANDINGS

Station outstandings represent the unrealized amounts for the services are rendered by the
Station. The station Master is held responsible for the accountal of these. The station outstandings from
month to month are shown as closing balance in the Station Balance Sheet.

The list of Outstandings are submitted along with the Station Balance Sheet to the Traffic
Accounts Office.

The Station outstandings accumulate on account of the following transactions.

i) Freight outstandings where the To-pay invoices and pacel way bills have been
accounted for by the Station, but the delivery of the Consignments has not been
affected by the consignees.
ii) Irregular freight outstandings due to error in invoicing, forced entries, diversion of
goods, withdrawal of consignments after the dispatch of invoices to Traffic Accounts
Branch, twice accountal of invoices by the Stations etc.
iii) New receipt of consignments at the destination and delays in finalization of claims
cases.
iv) Wharfage and demurrage charges accrued but not realized or remission orders awaited.
v) Admitted debits not made good in time.
vi) Disputed Error Sheets(i.e. Not Admitted debits) not settled in time.

The other miscellaneous items are short accountal and short remittances of cash non submission
of over charge sheets and credit advice notes, cashier disallowance lists.

The list of Station Outstandings should be reviewed and clearances made so that the
outstandings are current and these are no inefficient balances or amounts outstanding for long periods.

24 Short Notes for Appendix III - A

60. LIMITED TENDERS

It is the primary duty of the Railway Management to obtain the best value possible for the
moneys spent. Tender system for the works as well as for the supply of stores items is considered as one
of the most effective methods of securing competitive rates.

Limited Tender System represents where enquiries are made only from the “Approved List of
Contractors or Manufacturers” maintained by the executive engineers and stores officer. Limited Tenders
are invited when it is considered advantageous to the Railways and are in public interest.

Limited Tenders are resorted in respect of the following cases.

i) Where it is considered advantageous in public interest not to call open tenders(i.e.

advertised tenders)
ii) Where the contracting agencies are limited in number and no useful purpose will be
served by open tenders.
iii) Where the work or supplies are considered urgent and it is considered that the
additional expenses likely to occur are worth taking and the reasons are recorded
thereof.
iv) Limited Tenders are invited from the “Approved List of Contractors” up to 40 lakhs
without financial concurrence and in case of stores up to 2 lakhs.

It should be ensured that a reasonable No. of Tenders are invited to quote to have effective
completion.

In case where the response is considered poor under the system, the rates quoted should be
critically examined. It should also be seen that adequate notices have been given and the notices are
received by the Tenderers.

61. STOCK ADJUSTMENT ACCOUNT

Stock Adjustment Account is a subsidiary suspense head of account under “stores suspense”.
This Account is intend to record

a) The Temporary fluctuations in the books value of stores items held in Stock.
b) Adjustment of differences discovered in the course of Stock Verification.
c) The differences arising due to revision of rates.

The Stock Adjustment Account is maintained in three parts viz:

Part I : Difference in Stock as a result of Stock Verification.

Part II : Differences in value due to revision of rates on account of Depreciation and
market fluctuations.
Part III : Miscellaneous items such as difference between book value and value realized in Sales,
losses due to breakage leakage, deterioration and obsolescence.

The postings in Stock Adjustment Account are made from the various journal vouchers made for
the different transactions.

As a rule all items appearing under Stock Adjustment Account may have to be cleared within six
months.

Being a Suspense Account, the items have to be reviewed periodically.

25 Short Notes for Appendix III - A

62. CAPITAL AT CHARGE

The Capital-at-Charge represents the value of physical assets of the Railway created out of the
Capital amount made available by the central Government from year to year. This is treated as Loan
Capital on which dividend at the prescribed percentage is paid annually by the Railways.

The Capital-at-Charge includes specific debt, non-specific debt and Capital contributed by
District Board etc.

63. SPECIFIC FUEL CONSUMPTION

The quantity of fuel consumed over 1000 GTKM is called as Specified Fuel Consumption.

It is arrived at with the help of following formula separately for electric, diesel and coal viz :

Total Fuel Consumption(in No. of Units)

SFC for Electric = ------------------------------------------------------
Total GTKM(in Thousands)

Total Fuel Consumption(in No. of Ltrs)

SFC for Diesel = ------------------------------------------------------
Total GTKM(in Thousands)

Total Fuel Consumption(in M.Tonnes)

SFC for Coal = ------------------------------------------------------
Total GTKM(in Thousands)

Further it is prepared for following items separately.

i) All Goods Trains

ii) All Passenger Trains
iii) All Shunting Trains
iv) All Departmental Trains
v) All combined Trains.

64. FIRM’s CREDIT NOTE

In the case of private firms specifically authorized by the Commercial authorities against
adequate amount of security sum as Bank Guarantee Firm’s Credit Notes are in vogue.

These are popularly known as “Credit Note-cum-Cheques”.

In the upper portion of such credit notes, the details of the transactions are noted by the Station
Master while the lower portion addressed to the Banker, serves as the Cheque. These are sent by the
stations to the cashier along with daily cash and the cashier directly remits them into the bank for
collection.

On account of the introduction of MICR Cheques, instead of Composite format of Credit Note-
cum-Cheque, only credit note forms are used and these are supported by MICR Cheques by quoting
reference there of.

26 Short Notes for Appendix III - A

65. INVENTORY TURNOVER RATIO

Inventory Turn Over Ratio is meant that the ratio in between the value of Stock on hand to a
st
peak day of the year or on 31 March of every year and value of total issue during the year.

It is mostly calculated for year ending period. A low ratio is always welcome by the Inventory
Manager because by this way it consume less Capital blocked and performs more efficiency by way of
more issue.

Now a days it is managed by Inventory Control System named as ABC analysis. Indian Railways is
now obtaining more and more better results i.e. Inventory Turn Over Ratio in past some year.

66. IMPREST CASH

Cash obtained not for any specific purpose, but as a standing advance for thepurpose of meeting
with the urgent requirement as and when they arise, are called Imprest Cash.

It is kept with the Officer to whom the account has been sanctioned. Amount of the Imprest has
also been decided after obtaining financial concurrence.

Imprest Account is maintained by an individual to whom a sum of money is advanced to enable

him to make certain classes of payment from Government viz payment of Petty Office Expenses and
emergent charges which cannot be foreseen.

This account is made in duplicate, one copy being retained by the Imprest holder and the Original
duly supported by necessary verified vouchers forwarded to the Accounts from time to time as the
Imprest holder to close this account(in most of the cases 2th of the month) so as to ensure that all the
transactions have been included for the month.

67. RETURNED STORES

The stores which are no longer required are returned to the Dept under “Advice Notes of
Returned Sotres Form” prepared in 6 foils
st
1 foil : Office copy
nd rd th nd
2 3 and 4 Foil : These are sent to stocking Dept along with RR 2 foil retained by Stocking
Depot
rd th
3 and 4 sent to Depot stores Accounts office after posting in the Bin cards, price ledgers are
th rd th
posted from 4 foil. 3 Foil is compared with 5 Foil received direct from the returning
rd th
subordinate. Advice of credit is issued against the Dept. with the support of 3 and 5 foils.
th th
6 Foil : The returning official sends 6 fuel to executive engineer/Divisional Officer concerned
(para 1604/S)

68. LIQUIDATED DAMAGES

The liquidated Damages is the amount recoverable from Contractors for their failure to execute
contract and supply materials as per agreement in force. The amount recoverable should be only
reasonable compensation not exceeding the amount so named or stipulated in the contract.

The compensation is computed on the basis of the actual sustained by he Railway or the
inconvenience that has been caused by the failure of the contract even though no loss actually been
incurred.

27 Short Notes for Appendix III - A

 The amount of actual loss resulting from increase in expenditure on execution of work/supply is
temporarily held under Miscellaneous advances pending recovery and is not debited to the work or
normal expenditure Lead.

69. NEXT BELOW RULE

The intentions of Next Below Rule is that an officer out of his regular line should not suffer by
forfeiting acting promotion which he would otherwise have received, had he remained in his regular line.
From this it follows that the fortuitous action promotion of some one junior to an officer who is out of the
regular line does not in itself give rise to a claim under the “Next Below Rule”. Before such a claim is
established it would be necessary that the following conditions are fulfilled :
a) That the promotion in the regular line is not fortuitous.
b) That all the staff senior to the Officer have been given acting promotion unless in any case
the acting promotion is not given because of this inefficiency, unsuitability or on leave.
c) That an officer Next below him and in the event of inadmissibility of such staff, the next
junior has been promoted.
d) That the post within the cadre remains unfilled for want of approved person junior to the
Officer and
e) That the vacancy caused in the cadre is not filled up by making promotion on adhoc
promotion basis till the release of next panel when some junior become available for
promotion.

If the above conditions are fulfilled the officer who is outside the regular line of service shall get
his pay fixed not less that what he would have got by virtue of his promotion in his regular line.

70. APPORTIONMENT OF GOODS EARNINGS

(i) Apportionment of Govt. Railway Traffic. Under the mechanized procedure of

accounting the preparation of Grand summary and listing has been dispensed with.

The result of apportionment is obtained through computer with the help of Summary Cards,
Master Cards and follow on Cards specially prepared for the purpose.

The Summary Cards are prepared from the Individual Basic Cards, Master Cards shows the
percentage of distance between each pair of stations for the purpose of apportionment of traffic
earnings. The result so obtained is consolidated by the forwarding Railways and intimated to the Railways
involved in the Transactions.

(ii) Apportionment of Non-Govt. Railway Traffic: The apportionment of Non-Government

Railway Traffic is done on the basis of Division sheets.

The Division sheets is posted from the checked invoices and shows the No. and date of invoice,
station from and to, weight, debits under forwarding and receiving railway i.e. freight paid and to-
pay, proportions and over charges in favour of home line and forwarding railways.

The accuracy of postings in the Division Sheet is checked with a proof sheet compiled from via
summaries by Inward abstract checking section.

The Division sheets are sent to the Railway concerned not later than 21 days of the close of the
period to which they relate.

The Division sheets are prepared by the Accounts office of the receiving Railways.

28 Short Notes for Appendix III - A

71. CREDIT NOTE

It is composite document, the upper portion of which contains full particulars of the goods or
parcels, etc. for which conveyance is required along with the amount chargeable and the Lower portion
being a bill of exchange for the amount payable. It is treated as a voucher for payment of fares and
freight due on the transaction for which these are tendered at the Stations.

The stations send the same to the Accounts Office in lieu of cash. These are checked in the
Accounts Office and the correct amount is billed for against departments etc. through carriage bills issued
against the parties concerned.

The amount is recovered either in cash or Book adjustment, as the case may be. Different forms
of Credit Notes are used for Military Departments and Civil Departments. This facility is afforded to its
customers by the Railway Departments as a commercial practice.

The Railway Department gets commission charges on Credit Note in consideration of the extra
service rendered. The commission is in addition to the fares and freight and is included in the Carriage
Bills as a separate item.

In the case of Private firms, specially authorized by the commercial authorities against adequate
security such as Bank guarantee, firm’s credit note are in vogue. These are popularly known as “Credit
Note-cum-Cheque”.

In the upper portion of such credit notes, the details of the transactions arenoted by Station
Master while the lower portion addressed to the Banker serves as a cheque. These are sent by the
Station Masters and the cashier along with the daily cash and the cashier directly remits them into the
Bank for collection.

On account of introduction of MICR Cheques, instead of composite format of Credit Note-cum-

Cheque, only Credit Note Forms are used and these are supported by MICR Cheques by quoting reference
there of.

72. CONTAINER SERVICES

Domestic Container with 5 tonne way load moved on specially designed “wagon flats” has been
in use on the Indian Railways between selected pairs of stations.

Container service offers distinct advantages to the traders specially designed road units bring the
containers to the door step of the consignor. The containers are loaded at the premises of the consignor
and locked in his presence. The Railway receipt are given on the spot.

The containers are transported to the depot sidings at container terminal and loaded on the
“wagon Flats”. The wagon flats are dispatched by specified fast trains including speed link expresses with
guaranteed transit time at the destination, the containers are unloaded and moved in special trucks at the
spot specified by the consignee.

Container Corporation of India ltd.(CONCOR), a Government of India undertaking under Ministry

of Railways has taken over the management and operation of ISO Container services including terminal
activities at the Inland Container Depots earlier owned and managed by the Indian Railways.

29 Short Notes for Appendix III - A

 The ISO containers aremarine containers of standard dimensions. These containers carry import
and export cargo between the ports and inland locations. Transport of Domestic cargo in these
containers is also being undertaken by CONCOR.

The Railway Board have authorized CONCOR to issue CONCOR-I WB(InlandWay Bill) in lieu of
Railway Receipt and deal directly with the customer. CONCOR separately remit Railway freight at rates
fixed by the Railway Board to the concerned Zonal Railways periodically.

73. DEPOSIT WORKS

Deposit works are works executed by the Railway for other Government Departments, State
Government, Local Bodies, Private individuals etc.

The cost of which is not met out of Railway funds, but out of funds from Non-Railway sources.

In order to meet the cost of preparation of plans and estimates for such works undertaken fro
private individuals, the party concerned should deposit a certain sum on a sliding scale basis.

The acceptance of the Government department should be obtained for the estimate before the
same is submitted to the competent Railway authority for sanction.

Work required by a Private individual cannot be started till the estimated cost there of is
deposited with the Railway by the concerned party.

74. CORPORATE PLAN:

Indian Railways has drawn up a Corporate Plan for the 15 years period 1985-2000, providing a
basic frame work for planning.

The main objectives enunciated in the corporate plan are :

1) Build Up capacity of the Railway to carry by 2000 A.D
A) 370-400 Billion NTKM of freight traffic
B) 310-330 billion PKM non sub-urban passenger traffic
C) 105-110 billion PKM sub –urban passenger traffic.
2) Achieve 15% reduction in cost of transport in real terms

To achieve these objectives, Indian Railways Plans to adopt the following strategies :

A) Optimise investment and improve productivity of assets.

B) Upgrade technology
C) Bring down costs by reducing fuel consumption material costs etc.
D) Adopt cost based tariff policy
E) Rehabilitate and maintain assets, particularly track and Rolling Stock.
F) Develop human resources
G) Divest auxiliary activities.

75. FOCAL POINT BANK SYSTEM

Under the pre-revised procedure, i.e. before introduction of Focal Point Bank System, the dealing
branches of nominated Banks were booking the transactions and reporting daily particulars thereof to
their respective link cell at Nagpur or GAD Bombay(in case of SBI) which consolidates all such transactions.

30 Short Notes for Appendix III - A

 The link cells/SBI, GAD were reporting the transactions to RBI/CAS, Nagpur for settlement by
Debit/Credit to the account of Ministry of Railways.

The dealing branches were also reporting the transactions daily to the FA & CAO’s through
payment/receipt scrolls with supporting paid cheques and challans etc. where these were verified with
the supporting documents and reconciled with the initial record.

The working of this scheme where large No. of Bank branches were directly dealing with
FA&CAO’s and Link cells was creating problems.

To stream line the procedure, the Focal Point Bank System, which is based on the concept of
“One PAO One Focal Point Branch” as introduced in CBEC, CBDT and DMA where it was proved to be
operationally successful was extended to Ministry of Railways w.e.f. 01-10-93.

Under this revised procedure all the existing dealing branch continued to handle the Railway
transactions in the usual way. The FA & CAO and the Accounts Officers authorized by him continued to be
in account with the same Bank Branches as hither to fore.

These dealing Branches have been linked for the purpose of reporting to FA & CAO and Link Cells
to the newly designated “Focal Point Branch” of the nominated Bank functioning at the centre where the
FA&CAO is situated.

The nominated PSBs have designated a Branch as the Focal Point Branch at the place where the
FA&CAO is located.

In selecting this Branch care has been taken to ensure that such Branch is nearer to the place of
office of FA&CAO, so that unnecessary correspondence could be avoided and better support established.

76. TRAFFIC SUSPENSE:

The following are the various components of Traffic suspense

1. Station Outstanding
2. Accounts Office Balance Sheet.
3. Cash-in-Transit
4. Demands Recoverable

Station Outstanding:
The Station outstanding represent those amounts for which station master has become
accountable but he has not liquidated his liabilities either by remittance of cash or vouchers or by taking
special credits as authorized upto the month.

These out standings generally relate to (i) Admitted debits (ii) Objected Debits (iii) consignment
on hand(iv) consignment not on hand(v) Demurrage/Whargage and misc. shunting siding etc.

Accounts Office Balance Sheet :

Station takes credit in their balancesheet for the amounts of fares and freight represented by
vouchers presented by various Government Departments and Para-Military organizations like BSF, CRPF
etc. They are sent to Accounts office in lieu of cash. The realization of this amount as also of other similar
amounts which do not pass through Station Balance Sheet devolves upon the Accounts Office and is made
through Carriage Bills against the various departments. The unrealized amount under this head is part of
Traffic suspense.

31 Short Notes for Appendix III - A

 Cash in Transit :
Station take credit in their balance sheet for cash realized by them in the month irrespective of
whether it is remitted to and acknowledged by the cash office in that month or in the subsequent month.
Such station cash for which credit has been allowed to the station in one month but which has been
rd
received in the cash office after the 3 of the following month and consequently included in the General
Books in the following month is called Cash in Transit.

Accounts to Adjust :
The outstanding under this head pertains to items of Special Credits and Special Debits taken by
the Stations in their Balance Sheet but correctness of which cannot be verified before the close of
accounts for the month concerned.

Demands Recoverable :
The outstanding under this head consists of Rent, Land and Lease charges, interest and
maintenance charges on siding etc.

77. DIVISIONALISATION OF STORES

The need for a separate Divisional set up to look after Stores work arose due to increase in the
volume of Stores transactions and to cater for requirements of the Divisional consuming units with
minimum delays.

Its objective was to improve the efficiency and productivity of the Stores Organisation and
eliminate wastages involved in centralized functions.

The Divisional Controller of Stores is in charge of Material Management in the Division and is
responsible to Chief Controller of Stores. He has a lumpsum imprest to make Local purchases.

The Divisional Stores Officer has the following functions :

1) To make periodical review of sanctioned Stores Imprest with the Subordinate units to ensure
that the Stores Imprest have been rationally fixed.
2) To arrange equitable distribution of excess material with in the Division.
3) To arrange disposal of scrap material.
4) To maintain liaison with Stores HQrs purchase officers as well as concerned Stores Depots.
5) To co-ordinate and regulate stores supplies etc.

78. ADVICE OF INTERNAL CHECK

It is prepared by the Accounts office in form AII 2754 separately for coaching and Goods Traffic
and send to the Stations concerne.

The advice compares the closing Balance as shown by the Station in the Balance Sheet with that
arrived at by the accounts office as a result of the check of various account documents and returns. The
difference between the two balances is supported by details working up to it.

All debits raised by the Accounts office or disallowances by the cashier as also for the stations are
recorded in the advice in detail to enable the station to take action for their clearance.

Items for the clearance of which the Accounts Office is responsible are grouped and shown as
“Accounts to Adjust”.

32 Short Notes for Appendix III - A

79. APPROPRIATION ACCOUNTS

In the Appropriation Accounts the original grant or appropriation are compared with the final
grants or appropriation and latter again compared with the actual expenditure of the year.

The explanations of variations between original grant or appropriation and the final grant or
appropriations and actual expenditure of the year are recorded under the Appropriation accounts are
prepared in Form F-403 by each Railway and sent to Railway Board on the dates fixed for the purpose by
the Board.

It is presented in the condensed form to the Public Accounts Committee along with Audit Report
thereon. The committee examines the Appropriation Accounts to satisfy itself on behalf of Parliament.

a) That the money shown in the accounts as having been disbursed were legally available for and
applicable to the service or purpose to which they have been approved or charged
b) That the expenditure conforms to the authority which governs it.
c) That every re apportionment has been made in accordance with the provisions made in this
behalf under rules framed by competent authority.

80. RESERVE PRICE

Sale of materials is made through auction. A price is fixed for bid, that price is called Reserve
Price.

Ordinarily the bid is not accepted below the Reserve Price. It is used as guiding factor for the
responsible Railway Officer in auctions for acceptance of bid.

This price is fixed on the basis of best bid in last auction and information received from other
sources. The Price is fixed by the Chief Controller of Stores and Depot Officer.

If it is accepted in the special circumstances below the Reserve Price, then reasons are to be
recorded in the files.

81. BUDGET ORDER

The Grants as “Voted” by the Parliament and appropriations as sanctioned by the President are
distributed by the Railway Board to the Zonal Railway Administration and other subordinate units.

The sums so distributed are called “Budget Allotments”, the orders by means of which the
allotments are distributed are called “budget Orders”. The Budget Orders are accompanied by the final
issue of Demands for Grants and works, Machinery and Rolling Stock Programmes.

82. PRICE VARIATION CLAUSE

In order to meet the variations in the price of materials, increase in labour charges, due to
Consumer Price Index, etc during the period of contract, a Price Variation Clause is included while inviting
tenders.

The clause if shown in the Special Condition of the Contract, so that indenting tenderers will
weigh the implications of Price Variation clause and quote their rates.

33 Short Notes for Appendix III - A

 The Price Variation clause will safe guard the interest of the contractors for any increase and the
market fluctuations at a future date. This in turn enable the Railway Administration to get reasonable
rate.

The Price Variation Clause for works contract will be expressed in terms of percentages.

83. PASSENGER CLASSIFICATION

It is monthly returns submitted by a Station to its Accounts Office showing all kinds of Tickets
sold by the Station during the month concerned as well as the amount collected.

It is posted from the Summary of daily trains-cum-summary book and prepared separately for
Local and Foreign (through) traffic. The total amount is taken to debit in the Balance Sheet.

84. ASSET REGISTER

Asset Registers are maintained in field units/Divisional units andin Head Quarters office which
records the assets created by the Railway. Two separate accounts are maintained representing the value
of all the physical assets of the Railway i.e. Block Account and Loan Account.

Block Account represents the value of ll the physical assets of the Railway irrespective of the
source through which such assets were acquired from year to year. The Block Account consists of
expenditure on Capital, Capital Fund, D.F, D.R.F., O.L.W.R. including New Minor Works. It is maintained
separately for Commercial and Strategic Lines. The investment cost of all projects including Buildings over
20 lakhs is docketed in Asset Register maintained by the civil engineering department in Form E 1720. It is
maintained to have correct information and to conduct post project appraisal if required.

The Loan Account represents only the value of those assets which are acquired at debit of
“Capital”, financed by General Finance of the Government, on which dividend is payable as per prescribed
rules from time to time.

There are large acale omissions and deficiencies in maintenance of these registers at present and
an endeavour is being made to computerize these registers and bring them up to date.

85. POST CHECK SYSTEM

FA & CAO may permit the payment of any class of payments, pay bills, muster sheets or labour
pay sheets before internal check either :

a) When the ordinary procedure or pre-check in offices under his control is likely to lead to any
delay and thereby cause any inconvenience to the staff affected or violate any of the provisions
of the extant statutes i.e. Payment of Wages Act, or
b) When a system or post check is found necessary in order that on even distribution of work
throughout the month either in the Bill preparing officer or in the bill checking offices under his
control or in the pay department.

Before introducing the Post Check, Accounts Officer should advise executive officer confidentially
and request him to ensure that the Bills are prepared by staff conversant with relevant rules and
regulations.

All checks are exercised in Post Check System, which are exercised during Pre-Check of bills at
the time of internal check.

34 Short Notes for Appendix III - A

86. CALENDAR OF RETURNS

Calendar of Returns is a list or Register showing the Schedule dates on which different returns
are to be received and submitted to the Head Quarters and Railway Board each month, quarterly, six
monthly and yearly basis.

Calendar of Returns are maintained in each field unit, Divisional Office, Workshop and Head
Quarters Office. Register of calendar of returns is put up to Branch Officers periodically and Monthly to
monitor the compliance of dates for submission of information to higher leve. These dates are given by
the Head Quarters Office and Railway Board with the consultation of executive officials at Head Quarters
and Board level.

87. EQUATED TRACK KILOMETER

Kilometerage of Track Equated on the basis of Trains run per day. Kilometerage of track equated
to standard unit by giving weightage for factors of traffic density, gradient formation of soil,
alignment(curves) rain falls and track connections and lay outs.

For running lines(including Running Loop Lines) the formula of working out equated Track
kilometers is as under :

Q = L x U(I+A+B+C)

Where Q = Equated Traffic Kms

L = Running Track Kms
U= Traffic density factor(which is different as per guage
& factors effecting running of tracks)

88. RAILWAY ACT 1989

The Railway Act which was passed in 1890 with forty four amendments had been made to the
Indian Railways Act 1890, during the last hundred years.

The Railway Act 1989, replaces the existing Act completely. Each section of existing Act has been
reviewed, redundant sections deleted. New sections added and the existing sections amended where
ever necessary.

The following Railway Bill 1986, was introduced in Lok Sabha on 25-04-1986. The Bill was
referred to Joint select committee of Both houses for a detailed examination. The Railway Bill, 1989 was
st
passed by Both Houses of Parliament and came into force from 1 July, 1990.

The Railway Act, 1989 has been recently amended to give additional powers to the railway
protection force regarding passengers and passengers area(with effect from 01-07-2004)

89. COMMISSIONER OF RAILWAY SAFETY

In chapter III of Railway Act, 1989, a new section has been added, which defines the role of the
Commissioner of Railway Safety. Time to time Railway administration is advised the norms of safety the
Chief Commissioner of Railway Safety to prepare an annual report, which is to be laid by the Government
before each House of Parliament.

Whenever the Commissioner of Railway safety makes an enquiry under the prescribed rules, he
shall submit a confidential report in writing and shall forward copies of the report to

35 Short Notes for Appendix III - A

 i) The Railway Board
ii) The Railway Administration of all Zonal Railways.
iii) Other Commissioners of Railway Safety
iv) The Director Intelligence bureau of the accident caused by the sabotage or
train wrecking
In case, the Railway board has reservations on the recommendations of the Chief Commissioner
the matter will be finally decided by the Central Government, Ministry of Civil Railways.

90. RAILWAY SERVICE (CONDUCT) RULES

The conduct Rules which were revised as a result of recommendations of Santhanam Committee
and others prescribed the Standard of Conduct expected of every railway servant and members of their
family. When acting under orders of the superior such order should be got confirmed in writing wherever
practicable.

All orders/instructions issued fromtime to time

Rule 3 : Every Railway Servant shall at all times
i) Maintain absolute integrity
ii) Maintain devotion to duty
iii) Do nothing which is subversionof law and order and is unbecoming of a Railway Or
Government servant
iv) Maintain promptness and courtesy
v) Observance of Government policies.
vi) No Government Servant shall involve himself in any activity of sexual harassment of any
female employee at work place etc.

These Conduct Rules shall apply to every Railway Servant but shall not apply to
a) Any member of the All India Services
b) Any member of Railway Protection Force as defined in R.P.F Act
c) Any person in causal appointment.

91. BLOCK ACCOUNT

st
From 1 April 1950, two separate accounts are maintained to represent the value of all the
physical assets of the railway undertaking.
a) Loan account
b) Block Account
The Loan account represents the Loan (share) capital and the physical assets created there from.

The Block Account represents all the physical assets of the undertaking whether financed from
Loan Capital or the Railway’s own generation of funds.

The Block Account is maintained in Form – F-429 separately for commercial and strategic lines
and includes
a) Expenditure on Capital A/c.
b) Expenditure from Development Fund.
c) Expenditure from the Depreciation Reserve Fund.
d) The Development Fund and Open Line Works register including “New Minor Works” relating
only to creation of new assets or improvement in the assets replaced.
e) Expenditure from the Accident Compensations, safety and Passenger Amenities Fund on
Passenger Amenities and safety works and
f) Expenditure on any assets which have come to railways without financial adjustment or from
a source not covered by the above mentioned items (a) to (e)

36 Short Notes for Appendix III - A

 Short Notes
for Appendix
III A
GENERAL RULES & PROCEDURES
[ G.R.P ]

Compiled by the Staff

of Sr.DFM’s Office,
Hubli

37 Short Notes for Appendix III - A