94910 43283: Shri.

Damodara Prasad

Completion report

Object

The engineering code stipulates that completion reports have to be prepared in form E-1706, in
order to compare the cost of work actually incurred with that provided in the last estimate, with
brief explanation for the variation.

The completion report of a project duly verified by the Accounts Office should be submitted to the
Railway Board within 18 months after the end of the financial half year in which the completion
estimate is submitted. It should state the expenditure in the same details as the abstract estimate
sanctioned by the Railway Board and should indicate any material modifications if any thereto.

In the case of railway lines newly constructed the completion report should be accompanied by a
comparative statement showing the financial prospects of the line as anticipated and as updated
with reference to the completion cost.

A Completion report duly verified by the Accounts Officer should ordinarily be submitted to the
authority who accorded the administrative approval to the work for information or regularisation.

Check

Completion reports should be checked to see that they have been prepared in the proper form and
that the entries therein correspond with the particulars of the sanction and booked outlay. Special
attention should be devoted to the following points.

(a) Checking the correctness of postings of aII final bills relating to a work in the account of the work;
(b) test-checking the correctness of a percentage of other items (c) seeing that satisfactory
explanations are forthcoming for excesses and savings in the account; (d) seeing that all materials
charged to the work or works; but not used up, have been returned to stores or transferred
elsewhere and the account of the work credited with their value; (e) seeing that credit for the
released materials. provided for in the estimate has been adjusted against the work concerned.

All completion reports should be "verified" by the Accounts Officer as correct. The verification
certificate of the Accounts Officer should state the authority competent to sanction the outlay
shown in the report.

Even for unfinished works, if for any reason a work on which expenditure has been incurred is
stopped, and if there is no reasonable prospect of completing it in near future, the account of the
work should be closed and a completion report drawn and submitted to the authority which
accorded the administrative approval to the work, for information.

When a work is completed and its accounts closed by drawal of CR, a double red ink line should be
ruled below the last entry in the Register of Works.

Audit view
If a test audit by PAC revealed for 78 Railway projects commissioned 24 years ago, instances of non-
preparation of reports, the "quantum" of such cases, across zones, would be much more.

The Public Accounts Committee (PAC) in its report on the "Accounting of Projects in Indian Railways"
said that this raised "serious doubts" about the possibility of adding on expenditure even after
completion of actual work as the books were kept open for such a long time.

Acquittance certificate

Consequent upon introduction of ECS/EFT/ NEFT modes of payment, all cheques of such
transactions are sent directly to RBI by Books action without routing through Cash office. The bills
are collected by cash office for entering the same in the cashier's cash book on debit side. However,
the status of payment is to be confirmed by book section and posted on the credit side of PMR cash
book being the amount of liability discharged. Pay bills are returned to book section duly bringing
out the unpaid amount the position. The position of Unpaid amount solely depend on the feedback
from books action. Based on this, acquittance certificate is issued in form A. 1963 by Accounts officer
to the cashier to the extent liability was discharged.

The certificate indicates the amount and month to which the liability related. It also indicates that
the paid bills were received back from cash office and that there were no objectionable items. It also
indicates that unpaid amount if any exists, the same has been deposited in the bank duly giving
reference to the challan number and date.

Transfer certificate

Transfer certificate is a document through which all transfer transactions (either intra Railway or
inter Railway; both for debit and credit) will take place. This will be generated by the transaction
originating Railway, duly uploading all the relevant documents connected to the transaction so that
the debit or credit will be accepted by the destination unit without any delay. Once sent by the
originating accounting circle, Transfer certificate will appear in the action pane of the destination
unit for acceptance and preparing JV.

Operating ratio

In finance, the Operating ratio is a company's operating expenses as a percentage of revenue. In

Railways all over world, an operating ratio of 80 or lower is considered desirable.

The financial health of the railways is determined by its Operating Ratio (OR).

Operating Ratio, i.e., percentage of gross working expenses to gross earnings, (excluding Suspense).

OR the lower, the better. Operating Ratio can be decreased by reducing expenditure and
augmenting income and efficiency. It is compared for a zonal railway or IR as a whole over the years.
But, it is not a good ratio for comparison of financial performance of different zonal Railways.

Operating ratio is worked out for zonal Railways and IR as a whole. It can't be computed for Division
units, because of the fact that traffic accounts is centralised and no apportioned earnings could be
worked out Division-wise.
To know the División performance, Performance Efficiency Index is worked out. In place of
apportioned earnings, for PEI originating earnings of a división and ordinary working expenses are
considered.

Operating ratio of Indian Railways is 111 per cent for April-July period paint dismal picture during
current FY. (Which means for an income of every Rs 100, the railways spends Rs 111.51). It reflects
lower than targeted traffic growth but higher expenditure owing to increased pension liability and
operational expenses.

Inventory Turnover Ratio

Inventories of raw materials, stores and spare parts, and the value of unfinished jobs (known as
work-process) in Railways represent essential, but unproductive, Capital investment.

Efficient inventory management requires lowest stock levels with the highest service levels. This
objective is secured through budgeting for inventories after careful scheduling of deliveries
against purchases and regular monitoring of the changing needs of the indentors.

Inventory Turnover Ratio is worked out by taking Stores inventory on 31st March (stores, '
purchases', 'sales', and miscellaneous advance- capital, SAA.,) as percentage of the total issue of
stores during the year.

Here also, figure the lower , the better.

M remittance

All railway transactions can be categorised into Revenue, Capital, Debt and Remittance
Transactions. M- remittance forms part of remittance transactions.

M remittance is a Major head on expenditure side under Part III Public Account (in Government
accounting). It includes Inter Government Adjustment Accounts, PAO suspense, AG suspense, Public
Sector Bank (Suspense), Reserve Bank Suspense. Cheques & Bills, Remittance into Bank Adjusting
A/cs. With P& T , Adjusting A/c with Defence etc.

Balances

In case M-Remittances-Inter Govt. adjustments-outstanding balance represents the amount for

which settlement could not be effected in the Reserve Bank Account during the year.

Items appearing under this Account represent transactions originating on the Railway which are
adjustable with other Government Departments.

It should be reviewed to see that there is no undue delay in the clearance of the items by the issue
of Advice to Reserve Bank and the receipt of clearance memo from the Bank.

Cash in transit
Stations take credit in their Balance Sheets for cash realized by them in the month irrespective
of whether it is remitted to and acknowledged by the Cashier in that month or in the
subsequent month. Such station cash for which credit has been allowed to the Stations in one
month but, which has been received in the Cash Office after the third of the following month
and consequently included in the General Books in the following month, is called Cash in
transit.

Cash in Transit causes the difference between the balance in the Traffic Book and that in the
General Books.

Capital

It is one of the sources of financing. It is budget support given from general revenues. Prior to
merger of Railway budget with general budget railways used to pay dividend; but with merger of rail
budget with general budget wef 2017-18, no divend is payable.

Capital bears ---

the cost of land,

the first cost of constructions and equipment of (i) new lines including strategic lines, whether
remunerative or unremunerative and (ii) new production units;

the cost of maintaining a section of the line not opened for working;

the cost of any tools and plant specifically purchased, and of any posts specially created for
the supervision or construction of a work.

Capital is credited with -

the cost at debit of Capital of an asset (other than land) which is abandoned or disposed of
without being replaced, as a part of write back adjustment.

IPAS – Integrated Pay-roll and Accounting System

IPAS Application software (the software for Accounts Information Management System) was
developed by CRIS on web based 3-tier centralized architecture using Java and Oracle. It brings a
common Application to all Railways on a centralized platform so that similar processes are followed
across Railways in terms of accounting practices.

A key benefit of such centralization is a faster change management and integration of effort along
with automation of processes.

IPAS application is undergoing a continuous up-gradation to achieve better efficiency, security and
safety. IPAS will provide real time access to financial transaction data across IR and will also bring
financial and fiscal discipline.

Core design of IPAS Application is same as design of PRIME/AFRES.

There are two types of modules in IPAS

Payroll: Employee Profile, Payroll, Salary, Allowances & Recoveries, Annual Increments, Income Tax,
Bonus, Cash Compensation, DA Arrear, Supplementary Bills, Traveling Allowance, Leave, Settlement,
Leave Salary, GIS, DCRG, Quarters, Electricity, Cadre (Book of Sanction), Workshop Incentive,
Loans & Advances are the working parts of payroll.

Accounts: Internal Check, Books, PF, NPS, Pension, Cash & Pay, Suspense & Budget are the working
parts of accounts.

Integrated Payroll and Accounting System (IPAS) has eliminated various hassles of manual working
and the system is brought into a centralized platform and architecture.

Single tender - Single offer

The system of invitation of tenders by public advertisements in the most open public manner
possible should be used as a general rule and must be adopted with certain exceptions on IR.

One such exception is single tender while others are Limited tender and dispensing with tender
system.

Calling of single tender is resorted to only in exceptional circumstances, after recording necessary
certificates, only in Emergent Situation like Accidents, breaches involving dislocation to traffic.

‘Annual Maintenance Contract’ for equipment can be placed on single tender basis on authorised
dealers with approval of Additional General Managers of Railways.

The proposal for Single Tender should be prepared by executive. This should be concurred by PFA
and personally approved by GM. This power is not to be delegated to any other authority.
Thereafter, the tender committee will be one stage higher depending upon the delegation of powers
in the normal tendering process.

Single offer is receipt of one offer in response to an Open or a Limited tender, whereas in single
tender we call only one tenderer to take up the work. This should not be treated as Single tender,
but as Open or Limited tender only, as the case may be and processed accordingly. It should not be
discharged in routine way. It can be considered by a TC, by examining the reasonableness of rate(s)
offered.

Rail travel coupons

These coupons are issued to mercantile firms, touring Government officials, accredited press
correspondents, news cameramen accredited at the headquarters of the Government of India, and
the members of Legislative Assemblies/Councils, as notified from time to time, under the rules and
conditions appearing in the I.R.CA Coaching Tariff.

The rail travel coupon books will be supplied by the ticket printing office to the Headquarters Office,
Divisional Office or certain selected stations authorized to issue them, an advice being sent to the
Traffic Accounts Office.

The coupon books should, on receipt, be checked and counted like other money value books and
entered in a special register kept for the purpose. The sale of coupon books will be made in
accordance with the rules and conditions laid down in the I.R.C.A Coaching Tariff, a monthly return
being submitted to the Traffic Accounts Office.

The amount realized by the sale of coupon books should be remitted by the commercial offices
through miscellaneous receipt transmit note to the Station Master and account for it as "Sundry
receipts" and remit to the cash office with his day's cash duly entered in the cash remittance note.

The rail travel coupons exchanged at stations for ordinary tickets should be submitted by stations to
the Traffic Accounts Office along with the passengers classification return of printed tickets or blank
paper tickets, as the case may be, in support of the free tickets issued and take credit under
vouchers in the station balance sheet.; debit already lies on debit side under passengers - local or
foreign.

Combined Train Report (CTR)

This is the most important document regarding Operating Statistics. It is prepared jointly by
the Driver & Guard of the train as per their run. After completion of the trip it is deposited
by the guard in the Loco crew Office. It collects all the CTRs and submit them to the
Statistical Branch daily with the covering memo. The covering memo shows the number of
CTRs due on date and also the no. of CTRs being sent with the remaining balance. The
complete set of returns is scheduled to be received in the Statistical Office by the 5th of
the following month. The non-submissions of the CTRs are called for from the sheds
concerned.

The CTRs are divided into two parts – Part-I is the loco portion while the Part-II is the
vehicle/ wagon portion. Part-I gives loco details and Part-II gives wagon & vehicle details.

The CTR forms are very important for maintaining the data related to train operation. Therefore the
train crew should fill it up properly and submit the same to their Hqrs depot. This CTR form is also
the basic record for payment of mileage allowance to train crew.

Four copies of CTR forms are collected by the guard of the train at the time of signing on.

These forms are filled in by the guard of the train in quadruplicate.

At the end of the journey, guard and driver meet with each other at the time of signing off and the
guard of the train hand over the three copies of CTR forms to the driver after verifying the various
timing recorded in the CTR forms.

The driver, in turn, fills up his position of the entries in the guard journal in all the four copies.

Driver submits the three copies of the CTR form to his headquarter depot.

It contains all the details of train working.. regarding its fit to proceed, signals, etc.

These three copies of CTR forms are disposed of as under:

- One copy is sent to statistical branch.

- One copy is retained by the depot in charge for his record.

- One copy is sent to loco running bill section.

Lease charges

Indian Railways borrow money through the Indian Railway Finance Corporation (IRFC) for acquiring
rolling stock by the financial lease route. These lease payment have two components, viz principal
components and interest.

Prior to 2005-06, these payments were fully met through the Ordinary Working Expenses (Revenue
Grant No.9, now SMH #7). However, from the year 2005-06 the Accounting policy in respect of
accountal of lease charges payable to IRFC was modified.

As per new accounting system,Capital component was to be charged to Capital Fund (erstwhile grant
No. 16, now MH#5002, SMH#01,planhead 2200 lease charges) and interest component was to be
charged to Revenue Grant No. 9, now SMH#7.

Wagon Turn Round

Wagon turn round means the average time that it takes for a wagon to go through one
complete cycle of loading movement to destination, unloading and next loading. In other
words it is also the interval in days between two successive loading.

Wagon turn round = Effective Wagons/ (Loaded wagons + loaded wagons received)

'Effective wagon' holding represents wagons owned by a railway less the daily average no. of
wagons out of service modified by the daily average wagon balance.

It is reflected in number of days.

This figure is an index of operating efficiency.

This unit is an indication of wagon movement and utilisation.

Lower figure will be considered a better result.

Factors

The main factors governing wagon turn round are average lead, traffic density, ruling
gradients affecting speed, line facilities such as double or single lines and main & branch line
connections at junctions, utilisation of traction etc.

Accrual accounting

The accrual system of accounting records revenue and expenses when they are incurred;

the system registers transactions carried out on a credit basis, by recording these as either
'receivables or payables'. This means a transaction is recorded when the right to earn income is
established or when expenditure is committed.

All government departments and states will eventually move to an accrual-basis system as per a
recommendation of the Twelfth Finance Commission. The cash-based/actual based system of
accounting is followed by many countries across the world — New Zealand, Australia, Canada, the
US, the UK and Sweden are some of the countries which have moved to accrual-based accounting.

In the cash-based system being followed currently, however, transactions carried out on credit basis
are not recognised. The main objective is to record only the flow of cash as it comes/goes. The
records of assets created, purchased, disposed of etc are not kept properly.

Our inability to attract private funds or even multilateral finance for its huge expansion needs... is
partly due to the opaque system of accounting followed and lack of clarity on return on investments.
Even though the gross receipts are shown to slightly exceed ordinary working expenses, it is partly
because of the flexibility IR enjoys, when it comes to appropriations to various funds, including DRF.

With the support of the Institute of Chartered Accountants of India (ICAI), which is also helping in a
pan-India roll-out, IR is planning to move to accrual based accounting.

Under the current cash flows-based system, the railways may have tendered services but not
received payment or it may have received payment but service could be due....such instances are
recognised as actually happened. For instance, if a passenger books a ticket on March 30 for a
journey to be undertaken on April 2, the current system will account it as an income for the year
ending March 31. However, the passenger may decide on April 1 to cancel the ticket which will entail
a refund. This liability is not recognised in the current format, the accrual system will put the liable
refund amount under 'current liability'.

Another instance....at present, the railways budgets for around Rs45,000 crore a year as pension
outgo. In the current scenario, IR could be spending without even knowing the future capital
requirements. The total long-term pension liability of the railways could run into several lakh crores
for the current staff. Accrual accounting gives a true picture of assets and liabilities which one may
not liquidate immediately but gives a glimpse of liabilities today over a period of time to come as an
organisation expands.

Asset register

Assets of the Indian Railways includes buildings, tracks, overhead lines, signalling and rolling stock,
among others, across the country. Such assets were assigned a value of Re1 to ensure the asset is
mapped and a disclosure was given in the notes to account. For this purpose, a format called fixed
asset register is prepared. Earlier, there was no system of capturing fixed assets as 'Block account'
was used, which is an aggregation of the amount spent on assets till date, but a particular value to
an asset was not maintained. This necessitated the need to map all the assets physically.

DRF provisions

This is one more grey area. The asset register will lay a firm foundation for applying sound
commercial principles of appropriation to DRF. It is a known fact that IR is not following commercial
principles in DRF policy being followed now.

Annual Budget- Parliamentary control

The control of Parliament over railway finance and policy is exercised by members of parliament in
Estimates committee, committee on subordinate legislation, national railway users consultative
committee, committee on Government assurances, public accounts committee, and above all by
means of interpellations, resolutions, and discussions when the Budget is presented, and voted
upon.

Coming to Parliamentary Financial Control, Annual Budget (Under Article 112 of the
Constitution), which is a statement of the estimated annual receipts and expenditure whether on
Capital segment or on Revenue segment of the Railways, commonly known as the ' Budget', is laid
before both the Houses of Parliament by Finance Minister. The proposed expenditure included
in the Budget may be—(i) Voted, or (ii) Charged.

i. Parliament has the power to assent, or to refuse to assent, to any demand or to assent to any
demand subject to a reduction of the amount.

ii. Members of the Lok Sabha may send in to the Lok Sabha Secretariat their proposals for cuts
(Disapproval of Policy Cut , Economy cut or Token cut) in the individual demands or for omission of
individual demands.

iii. Any Member of Parliament may ask a question (either starred or unstarred) for the purpose of
obtaining information on a matter of public importance.

iv. Discussion on a definite matter of urgent public importance may be sought by a Member
through an Adjournment Motion or a Calling Attention Notice.

v. Give recommendations while functioning in Public Accounts Committee or in Standing committee

on Railways.

Supplementary grant

Based on the Revised Estimates of the individual Railways, the Railway Board presents a
Supplementary demand to the Parliament for their vote. After the same is voted by the
Parliament, copies of the Book of Supplementary demands will be forwarded to the Railway
Administrations and to this Office. The amount allocated to the Individual Railways in respect
of each grant out of the supplementary grants voted by the Parliament will also be advised
separately by the Railway Board to the Railway Administrations and to this Office. The funds
so allotted to the Railway will be distributed in the same manner as the Original Grant.

(Earlier, August review is mainly intended for the Railway Board to enable them to obtain a
supplementary grant duly voted by the Legislature, after taking into account the position on
all the Railways. With dispensation of AR, this opportunity is lost.)

Now, Rly board is left with one option ie., RE stage to do this exercise.

If the amount of a grant/appropriation in the budget is found to be insufficient for the purpose of
the current year, an estimate for supplementary grant /appropriation, is submitted by the Railway
Board to the vote of the Parliament/ sanction of the President in the same way as the original grant,
except that the recommendation of the President has to be obtained for supplementary Demands
not only under Article 113 (3) but also under Article 115 (1) (a) and 115(2) of the Constitution.

Excess grant

Budget Grants and Supplementary Grants are obtained from Parliament in respect of expenditure to
be incurred during the year, Excess Grants relate to expenditure already incurred, for reasons to be
fully explained, in excess of the grant voted by Parliament. The demand for an excess grant is based
on the recommendations of the Public Accounts Committee as a result of their scrutiny of the
Appropriation Accounts of the Railways and the Audit Report of the Comptroller and Auditor
General. Excess grants have to be presented after obtaining the recommendation of the President
not only under Article 113(3), but also under Article 115(2) and 115 (1) (b)of the Constitution.

Budget Allotment

The grants as voted by the Parliament and the appropriation for the charged expenditure as
sanctioned by the President, are distributed by the Railway Board among the railway
administrations and other authorities subordinate to them, as soon as possible after the Budget
is sanctioned.

The sums so distributed are called ‘Budget Allotments’.

The allotments made out of funds voted by the Parliament are shown as ‘Voted’ and those
fixed by the President are shown as ‘Charged’.

Budget Orders

The orders by means of which the allotments are communicated are called "Budget Orders". They
show the allotment made to each Railway subhead-wise and PU-wise under each Sub Major Head
and the General Manager (Budget) of the Railway takes action on receipt of these orders to
distribute the allotments to various heads of Departments and Divisions under his control.

In the event of the Budget Orders of the Railway Board not being received before the
commencement of the financial year, the railway administrations are empowered to incur
expenditure on works which were in progress at the end of the previous financial year. All
expenditure incurred under this rule must be treated as a charge against the allotments eventually
made for such works.

When the Budget Orders issued by the Railway Board show any reduction in the estimates originally
submitted to them, prompt measures should be taken by the railway administrations to limit the
expenditure to the amounts allotted by the Railway Board.

Budget is operative until the close of the financial year. Under the ‘doctrine of lapse’, any
unspent balance shall lapse and not be available for utilisation in the following year.

Performance cum Outcome budget

The budgetary documents placed in parliament by IR generally include Performance cum Outcome
Budget also.
Outcome and Performance Budget of Railways placed for any particular budget year, bring out the
achievements/highlights that the railway has tried to deliver up to two years preceding the budget
year.

The "Outcome Budget" reflects the endeavour of the Government to convert "Outlays" into
"Outcomes" by planning expenditure, fixing appropriate targets and quantifying deliverables of each
scheme. The "Outcome Budget" is an effort of the Government to be transparent and accountable
to the people.

This performance cum outcome budget reports on the Outcomes of the Rail services in
terms of throughput, financial results, addition to capacity, and outcomes for the traveling
public and rail users.

The Outcome Budget for Railways has been introduced from 2006-07 keeping in view the
guidelines of the Government for converting financial outlays into physical outcomes.

The Performance Budget of Railways is prepared in pursuance of the recommendations of the

Standing Committee contained in their VI Report (1993-94).

i. indicates the comparative performance of Indian Railways in respect of Revenue and

Expenditure vis-à-vis the targets.

ii. performance in respect of works costing Rs. 5 crore and above, including transfer of funds
from one work to other; target dates of completion of the projects are also indicated.

iii. It also gives a summary appraisal of the Railway’s performance including shortfalls, if any,
in respect of revenue earnings, expenditure, works performance as provided in the ongoing
Five Year Plan and Annual Plan.

This Performance cum Outcome budget document provides an insight not only to the outlays
provided under various plan heads, but also the targets set vis-a-vis the progress achieved in
measurable terms, a feature unique to this Ministry’s budget documents.

The quantifiable performance units of expenditure relating to non-plan expenditure for

erstwhile Demand No. 4 to 12 are generally included in the respective Demands for Grants.

(After introduction of outcome budget to avoid repetition of information, Railway is presenting

'performance cum outcome budget' as one single document)

Integrated Budget

The Annual Budget of Railways consists of assessment of earnings and expenditure forming part of
Revenue segment Budget, and that relating to the investment decisions taken through the Works
Machinery and Rolling Stock Programmes under Capital segment. In order to co-relate the decisions
relating to all these aspects, a consolidated budget called integrated Budget including Revenue
(Earnings and Expenditure) Budget, Works Programme and the Machinery and Rolling Stock
Programmes should be submitted by the Railways alongwith the Works Programme as projected in
August review..
The Integrated Budget will include the projections of traffic and earnings, works working expenses,
the estimated financial results for the ensuing year, and the operating ratio in the proforma
specified by the Railway Board.

In the covering note to the Intergrated Budget the Railways should bring out the effect of the budget
proposals on the efficiency of operations as indicated by the operating ratio and the financial
viability of the system as reveraled by the financial returns on cpaital investment. It is treated like
submission of an MOU by GM to Railway board.

However, zonal Railways are not submitting August review after merger of railway budget with
general budget. Railways stopped sending preliminary works program. Thus integrated budget lost
its relevance and not being prepared or sent to railway board.

Urgency certificate

Expenditure may be incurred prior to the receipt of sanction of the authority in case of works
which are considered to be urgently necessary to safeguard 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 works the Divisional Engineer should authorise the commencement of the works and
submit a report to the authority competent to give administrative approval to the work and
to allot the required funds.

This urgency certificate/urgency report should contain:

a description of the work;

the date of commencement;

the circumstances which bring the work within this category;

the maximum probable cost of the work with an enclosure containing an abstract of
calculations; and

the date by which a detailed estimate of cost will be submitted.

Expenditure on repairs arising from special causes such as floods, monsoons, earthquake damages
caused due to accidents etc., is booked to special revenue. However, permanent works taken up
later on will be allocated to capital segment as usual.

Miscellaneous Advances Revenue

Miscellaneous Advances-Revenue (MAR) is operated to bring to account transactions pending

adjustment to final head of account such as

charges are debited to this head for which allocation is not known,

interdepartmental transactions awaiting acceptance,

expenditure incurred in anticipation of receipt of deposits or pending realization of the amount
expended,

payments in advance for stores,

payments made in advance to Railway Officials for Local Purchase of materials etc.

All entries in the registers should be posted in sufficient detail from the original document to
ensure that no items should at any time become inefficient merely due to non availability of
detailed particulars.

No item should remain unadjusted longer than is absolutely necessary.

Monthly reconciliation of debits /credits and balances of these accounts with General Books of
the Railway should be regularly made.

Registers should be reviewed frequently by an Accounts Officer and the early clearance of all
items is insisted upon by shifting transactions into their appropriate accounts.

Outstanding Credit/Minus Debits denote that credits were posted without linking the
corresponding debit particulars.

Huge accumulations under MAR indicate that the half yearly review is conducted in a routine
manner and amounts are allowed to remain in MAR for longer periods without being shifted to
the appropriate final heads. Items adjustable to final heads remained unadjusted resulting in
understatement of expenditure in the final heads.

Old items become inefficient as sufficient details of the original debits will not available in the
Subsidiary registers.

Credit items outstanding as adverse balances results in understatement of expenditure under

MAR.

MAR is budgeted for both debits and credits. The Net balance under this head is shown on the
Asset side of the Balance Sheet of IR.

Vitiation in works contracts

Vitiation is a condition where because of the huge variations and disparity in the rates quoted for
individual NS items, L-1 whom the work was awarded may become L-2.

In the case of vitiation of the tender due to variation (both for increase as well as for decrease of
value of the contract agreement), sanction of competent authority used to be obtained as per single
tender. This condition is superseded by recent instructions which means that such cases need not
be treated as single tender but can be decided the tender accepting authority who is competent to
allow variations.

Railway board has issued guidelines recently that when the percentage difference between the
present contract and new L-1, as a result of variation should be 10% for small contracts (that is
tender value less than 50 lacs) and 5 % for other than small value contracts should only be treated as
vitiated. It is also mentioned that percentage shall be calculated with base as the revised contract
quantities multiplied by the rates of the present contractor.

The railway administration in this case should try to bring a new agency and if it is not practically
feasible, then the vitiated quantities shall be negotiated with the existing contractor for the
additional quantities.

The problem of vitiation can be avoided by calling the bids on the basis of percentage above /below
/at par on the schedule value.

Variation in works contracts

If during the execution of a work the initial quantities of work mentioned in the agreement are
expected to vary substantially a check should be made immediately by comparing the value of the
revised work as per the rates quoted by the original tenderers to determine whether the decision to
award the contract to a particular tenderer is vitiated (ie., change in the inter se position of
tenderers L-1 becoming L-2) by the variation in quantities.

A variation between 15 to 25% depending on the nature of the particular category of work to be
done would not be considered as unreasonable. If such a variation of the award of the contract as
between tenderers is noticed, the railway administration should immediately examine whether it is
practicable to bring in a new agency to carry out the extra quantity of work keeping in view the
progress of the work on the original contract and the nature and lay-out of the work. If such a course
is not practicable, the reasons for the same may be recorded and approved by the competent
authority and negotiation should be carried out with the existing contractor for arriving at a
reasonable rate for the additional quantities of work.

Cashiers Debit

Cash collected at station is remitted to Chief cashier every day through Cash Remittance
note.

Credit is taken in balance sheet on the basis of acknowledgement copy of Cash remittance
Note.

Difference between the station copy and acknowledgement copy is taken as cashier’s debit in
the next month when acknowledgement is received late. It is mandatory to clear this debit
within 3 days.

This can be cleared only by remittance of amount in cash.

Block Account

Two separate accounts are maintained to represent the value of all the physical assets of the
railway undertaking a Loan Account and a 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
the loan capital or the Railways’ own funds.

The Block Account is maintained in form no. F-429 separately for commercial and strategic
lines.

Pool of surrendered posts

Creation of posts through matching surrender and by utilizing the money value available in the
Vacancy Bank or Surplus bank is done on Zonal Railways/PUs etc. In cases, where they are unable to
provide money value on their own, proposals are required to besent to the Railway Board.

Powers were delegated to DRMs to meet the requirement of posts in safety and operational
categories for new assets on a I : I basis, with the approval of the GeneralManager.

To empower the Zonal Railways to meet the requirement of additional posts for new assets; and for
_safety and operational activities- within their own resources a new concept of "pool of
surrendered posts' is introduced by board.

At the beginning of every financial year, each GM/DRM will carry out a Zero Based Review of all
posts appearing'in the Book of Sanctions, the total workload and decide the posts which are
required to be operated and the posts which are not required to be filled up immediately or are not
required to be operated.

Posts which have been lying vacant for long periods and for which no indents have been placed and
are no longer required to be filled up as per current needs should be included in the "Pool of
Surrendered Posts" and taken out from the Book ofSanctions (BOS) by issuing surrender
memorandum. All these posts shall be maintained in the "Pool of Surrendered Posts". Recruitment
action against these posts shall not be initiated.

This exercise should be completed within the first month of the financial year i.e by30th April every
year.

It is ensured that promotional prospects of the existing employees, avenue of promotion are not
adversely affected.

A Register listing posts in the "Pool of Surrendered Posts" should be maintained,duly indicating
therein the Division/Unit, Department, Category/designation of the post,Pay Band, Level, the date of
credit to this Pool and date of debit from this Pool, by way of withdrawal/redesignation along with
suitable remarks and signed yearly by the Personnel and Accounts Officers.

The posts which are manned, but which may not be needed or will not be needed inthe near future,
should also be identified and converted into supernumerary posts.

Utilisation

The posts included in the the "pool of Surrendered Posts", can be used to create safety category
posts needed for new assets only. In no case can it be used to create non-safety category posts.
Safety category posts or other operational posts which are to be created out of this surrendered
pool can be done in the pay band and grade pay as that of the surrendered posts.

Utilisation of posts included in "Pool of Surrendered Posis" from one Division/Workshop to another
Division/Workshop can be permitted by GM withconcurrence of associate Finance.

The accountal of the posts in the "Pool of Surrendered Posts" will be maintained by the CPO for the
Zonal Railway/PU and the Sr.DPO for the Division.

Debt Head Report -DHR

After the books for a financial year have been closed and after the final accounts current have
been submitted, the following accounts and return should be compiled and DHR is one among these
viz.,

The Capital and Revenue Accounts (Section II of the Annual Report- Financial Statements).

The Finance Accounts.

The Debt Head Report.

Statement of Voted ad Charged Expenditure. Appropriation accounts and connected Returns.

DHR

A report on the balances under the "Debt heads" submitted by PFA by 10th September, a copy
being furnished at the same time to the Statutory Auditor is called DHR. A copy duly audited
should be submitted to the Railway ministry, to reach by the 25th September.

The report should bring out an analysis of the various balances. The analysis may be in the form A-
749. Separate forms be prepared for "I-Small Savings, Provident fund". "K-Deposits and Advances",
"F-Loans and Advances" and "M-Remittances inter-Government adjustment accounts-Accounts with
States".

The report contains the following:

Head of Account, Balance at the end of previous year, balance at the end of current year, increase or
decrease in the balance during the year under review and remarks for the variation.

The report besides generally reviewing the outstanding balances, furnish explanations for important
variations from the previous year's balances and comments on the efficiency of the balances at the
end of the year under review.

Certificates by the Accounts Officer.-

Certificates, suitably modified wherever necessary, should be furnished by PFA on Debt head
Report :-

Eg. Regarding-"I-Small savings & provident Fund"-Provident Fund Balances.- Certified that the
balances at the end of the year, as per the general books agree with the total of the balances of
the individual members, as per personal ledgers and that advice slips showing the balances in the
Fund the credit of members on the 31st March, 19….. have been issued to them.

Likewise, regarding "K-Deposits and Advances", "F-Loans & Advances-Loans by the Central
Government"., "M-Remittances-inter-Government adjustment accounts-Accounts with States".,
Certificates indicated in the accounts code should be furnished.

Apart from these, a General certificate should also be furnished as under:

Certified that the balances shown in the Report agree with the General books and are supported by
details.

Audit certificate

The Debt Head Report should be got audited by the Statutory Auditor and his audit certificate should
be furnished to the Railway Board along with the audited copy of the report.

The audit certificate will be on the following lines:

Certified that as a result of the test audit of the accounts compiled under the direction of the general
manager that, subject to the observations below, the Review of Balances of the ……… Railways for
the year……….. has, to the best of my knowledge and belief, been correctly prepared.

Quotations

To dispense with calling of tenders for works which are urgent in nature quotation route is adopted.

Powers to call for quotations in works matters:

PHoD/HoD/DRM/ADRM: Up to Rs. 10 Lakhs per case for all works including works directly related to
safe running of trains with annual limit of Rs.1.2 cr

JAG/SG & SS officers (Independent charge) (i) Works directly related to safe running of trains: Up to
and including Rs.2 lakhs per case without finance concurrence subject to annual ceiling limit of Rs.
10 Lakhs.

(ii) All other works including works directly related to safe running of trains: Up to Rs.5 lakhs per
case with annual limit of Rs 60 lakhs in all (ie. Rs 10+Rs 50 cr).

Conditions

Finance concurrence is necessary except for works urgent nature and directly related to safe running
of trains is recorded. 2. No separate administrative approval is necessary. 3. The powers should be
exercised sparingly. Reasons to be recorded 4. Preparation/ sanction to the detailed estimates taken
wherever necessary. Allocation should be as per the rules in force 5. The work should not be split up
for the purpose of bringing it within the ambit of this dispensation 6. The reasonableness of rates
should be gone into objectively and in detail by the accepting authority. 7. Quotations should not be
for fancy (expensive but of low utility) items. 8. Quotations should only be for works which are
urgent in nature. 9. Quotations should normally be invited from at least three well experienced
contractors/ agencies, not necessarily borne on the approved list. 10. Accepting Authority must take
precautions to see that the quotations are from genuine firms (and not from fictitious firms). 11. A
Register showing the full particulars of works authorized through quotations shall be maintained by
the officer having powers to dispense with calling of tenders. The register shall be sent to associate
finance while seeking their concurrence. 12. The powers delegated are specific to the
department/division concerned. 13. Cross utilization of powers of equivalent officers in a
division/single administrative unit shall not be allowed.

Demands Recoverable

It is another link head maintained on earnings side in addition to Traffic Account.

Recovery of the following items is watched through a suspense head called Demands recoverable
maintained under traffic suspense.

a. land rent charges engineering and commercial plots

b. interest maintenance charges and inspection charges for sidings

c. rent on buildings

d. maintenance charge for RoBs, FoBs and level Crossings.

These are accounted for on accrual basis or on the basis of billing whether realised or not . The
moment any firm is billed for, it is brought to account by preparation of the following JV: Demands
recoverable debit

Abstract Z credit

Actual realisation of dues is watched through the suspense head Demands recoverable, which is part
of traffic suspense reflecting the gap between accrued and realized earnings. When the amount
billed is realised the suspense head Demands recoverable is credited and cash is debited.

The clearance under Demands recoverable leads to reduction in traffic suspense. However since the
clearance is on actual realisation basis, the earnings already accounted for do not get reduced.

There could be instances when some bills may have to be withdrawn in such case the journal entry
will be Abstract Z ( -) credit Demands recoverable ( -) debit.

The closing balance under this head represent unrealized amount in the form of outstanding . This
will be exhibited on Assets side of the Balance Sheet of Indian Railways.

Bills Receivables

Water charges, Electric energy charges, staff charges recoverable from outsiders are watched
through a register called Bills Receivable, maintained in Accounts office. Eg. cost of commercial staff
and/or other staff deputed to work in sidings; maintenance/ wagon repair charges.

Executive department concerned will raise the bill and send it to accounts office for record. Upon
receipt of the bill in accounts office the same is posted in the bills receivable register and remittance
is watched.
The realisation of these items form minus debit to the respective revenue major sub heads.

For example the cost of Engineering staff posted in a siding maybe billed, but accounted only when a
bill is raised and realized. At that time Sub Major head number 2 (erstwhile Demand 4) will be (- )
debited to reduce the expenditure.

Foreign Service Contributions

When a railway servant is in foreign service, contribution towards the cost of his pension must be
paid to general revenues on his behalf.

If the foreign service is in India, contributions must be paid on account of the cost of leave-salary
also.

These Contributions shall be paid by the railway servant himself unless the foreign employer
consents to pay them. They need not be payable during leave taken, while in foreign service.

Contributions on account of leave-salary may be required in the case of foreign service out of India
also; the contributions shall be paid by the foreign employer.

Interest or overdue contributions is payable in case of delay in remittances.

At the time of retirement, it should be seen FSC charges are received for the period under
deputation. If his contribution is not received for any period, the same shall not be reckoned for the
purpose of calculation of pension.

Accounts stock verification

The object of verification by the Accounts Department of Stores in the custody of the Depot and
other Departmental Officers and Subordinate is to ensure that the materials accord with the
description and specification shown in the balances appearing in the books and that excess or
deficiencies, if any, noticed on such verification are properly investigated and accounted for.

The verification is carried out by Stock Verifiers under the general supervision of the Stores Accounts
Officer and under the direction of the authorised Inspector of Stores Accounts.

The stock Verifier will prepare in triplicate (by carbon process) Stock sheets in Form (S. 1260) for all
items of stores, the verification of which has been completed that day. The stock sheets should be
prepared from the data in the field book. A Stock Verification Report is prepared at the time of
posting the priced ledger, in form S. 1260, showing the book balance, the ground balance as per the
stock sheet and the excess shortage, if any.

The stock sheets should invariably be finalised within a period of 6 months. Depot official's
explanation shall be carefully scrutinished by the authorised Inspector to see that every discrepancy
has been explained.

Aggregate effect of the adjustments is reported to GM half-yearly, for the purpose of adjustment of
the balance lying in the Stock Adjustment Accounts.

Departmental stock verification

As an important "back check" on the correct receipt and issue of stores by the Wards, it is necessary
to have a departmental check to see whether the upto date balance of an item in the ledger agrees
with the actual physical stock balance.

Such departmental verification is arranged by the depot officer and this will be in addition to the
Stock Verification arranged by the Accounts Department.

Depot Stock sheets prepared by the Stores Depots to adjust differences found in stock during their
periodical departmental checks.

Their scrutiny and further disposal will be on the same lines of Accounts stock Verification Sheets.

The authorised Inspector should review quarterly the departmental verification is carried out by the
Depot Officer as prescribed.

Material at site

Material obtained for specific works is to be kept outside the accounts of any other category of
stores. Such stores is required to be separately requisitioned and despatched to the sites of work.

The materials if not consumed on the work immediately on receipt at the site is temporarily held
under ‘Material-at-Site Account’ (MAS) in the works register as a sub-work.

Materials issued for consumption on the work, will be recorded as 'issue' with date and quantity; but
found subsequently to be surplus to requirements should be brought back into record as `Minus
Issues'.

However, material returned to Stores, transferred or otherwise disposed off should be shown in the
respective records with date, quantity and recorded as `Minus Receipts'.

In the Completion Report of each work it should be ensured that all materials originally charged to
the work but not used up have been returned to Stores or transferred to some other works and the
accounts of the work credited with their value, and thus the balance under MAS should be made nil.

The numerical account of the stores held under MAS is to be maintained by the stock holder.

Quarterly/ Half-yearly MAS returns are sent to Divisions where the opening balances, receipts,
reasonableness of issues, stores returned or transferred etc are verified.

On most of the Railways for many works, material-at-site account is not maintained. Periodical
return of material at site are not prepared by executives and sent to accounts for verification.

Cadre check register

Cadre means the strength of a service or part of a service sanctioned as a separate unit.

The Accounts Office will conduct a cadre check (at the time of passing the gazetted officers' pay bill),
which is the verification that appointments are not made in any grade or class of railway service in
excess of the sanctioned number of posts and that no post is filled or held in abeyance without the
orders of the competent authority.
A register in Form A. 1319 is maintained in the Account Office for the purpose of cadre check.

In the Cadre Register, separate folios should be set apart for each service, department or class of
appointments, as may be convenient.

The number of sanctioned posts in a grade, class should be entered at the top of the page or
pages assigned to it under the initials of the Section Officer (Accounts) in-charge of the section.

The column “Names of Incumbents” should be opened by entering in order of seniority the names
of the incumbents of permanent posts, officiating posts, temporary posts and workcharged posts (in
the same order) in the grade or class on 1st April.

From the departmental summary, a general summary showing only the excesses and savings in all
departments of the railway by categories of appointments should be prepared and placed before the
Accounts Officer.

The general summary will help the Accounts Officer to see whether an excess in any class or
category is or is not covered by a shortage in a higher class or category.

In case of workcharged posts or temporary pose the date up to which sanction exists shall be written
on the top against each incumbent. 3 months before the expiry of the sanction, a letter should be
written to the executive officer as well as P branch to initiate further extension or stop operation of
such posts.

Cases of excess over the cadre, operation of unsanctioned posts should be placed under objection
and reported to Personnel Branch for obtaining the sanction of the competent authority.

Scale check

Scale check register is posted from the salary bill to ascertain actual operation of posts as against
sanctioned strength.

The purpose is to ensure that the posts operated are not in excess of sanctioned strength.

Sanctioned strength is taken from Book of Sanctions prepared by P.branch and certified by Accounts
office.

It shall be ensured a statement comparing actuals with sanctioned strength is accompanied Salary
bill.

This is maintained for non-gazetted. For gazetted, cadre check register is maintained.

In case of lower scale posts are operated in excess of sanctioned strength, it should be seen that
proper remarks are forthcoming. Look for higher grade posts in equal number are available for the
excess operated in lower grade posts.

If not write to P.branch to remove the excess operation by transferring the incumbents or getting
sanctioned posts transferred.

It is maintained in accounts office, E section/non-gazetted.

Approximate Balance Sheet - Test balance sheet

Approximate Balance Sheet

When a Balance Sheet is not received from a station before the close of accounts for a month, an
Approximate Balance Sheet is prepared in the Accounts Office.

i opening balance should be the closing balance of the Balance Sheet for the previous month.

ii figures of returns and other documents received in the Accounts Office should be posted on the
debit side.

iii figures for 'Cash' and 'Vouchers' should be taken from the Cash and Voucher Registers and posted
on the credit side.

iv totals of the debit and credit sides should then be cast and balanced any difference between the
to being posted in the 'List of Errors' in the debit and credit column, as the case may be.

On receipt of the original Balance Sheet from the station, the entries therein should be compared
with those in the Approximate Balance Sheet, the difference, if any, being adjusted in the balance
sheet on-hand.

Later on the total figures should be taken to Part A of Traffic book.

Test balance sheet

The main station accounts returns will be compiled for the complete month but to enable the
Station Master to keep a check over the accuracy of his current accounts and to facilitate the
ultimate compilation of his monthly balance sheet, the accounting of all goods transactions of the
station should be tested at the end of each period. This is called test balance sheet.

i debits in the test balance sheet will be up-to-date To-pay and Undercharges total of the goods
delivery books, the wharfage and demurrage returns Accounts Office debits etc., a skeleton inward
summary being used for arriving at the total.

ii closing balance brought forward from the previous month will be the opening balance of the
current month.

iii credits in the test balance sheet will be cash credits to date as represented by the up-to-date
totals of inward To-pay traffic in the goods cash book, and special credits, if any.

Outstanding should be arrived and tallied with relevant registers/documents.

Any difference discovered in preparing these test balances should be traced out at once and put
right.

It is also prepared by Travelling Inspectors of Station Accounts. They prepare Test Balance Sheet in
respect of both coaching and goods traffic and submit them to the Accounts Officer along with their
inspection reports.
'Weight only' coal

This system is opposite to 'money coal' where cash is collected at booking station. Under 'weight
only' coal system, freight is collected by Accounts Office.

Upon booking 'weight only' coal, a bill will be preferred on the firm for such transactions.

The weight only bills will be submitted by the office of the PFA to the Head Office of the
firm.

Failure to pay freight within 10 days from presentation of bill surcharge will be levied on
their traffic and will be treated as To-pay Traffic and privilege of “Weight only System” will
be liable to be withdrawn.

To avail this facility parties are required to execute an agreement band on non-judicial stamp
paper with railways.

On “Weight only invoices” only weight and rate are show but fright is calculated by
Accounting Office.

Therefore, 'Weight only' coal will not appear in the station balance sheet

Specific Fuel Consumption

Specific Fuel Consumption (SFC) of an engine may be defined as the amount of fuel
consumed per unit work done.

i.e. SFC = Amount of Fuel consumed/ Amount of work done

The amount of work done is measured in terms of Tonne Km on railways. This is more
practical because here the total losses incurred in the locomotive/ formation of train are
taken into consideration for calculating the SFC.

The unit used is in liters/ 1000 GTKM. (GTKM means KM earned with the gross tonnage
hauled including the weight of the locomotive).The quantity of fuel consumed should be
based on the actual consumption figures.

It is obvious that lower the SFC better is the Fuel Economy.

The unit gives the idea of load and distance in relation to fuel consumption. Since, load &
distance are the most important factors that affect the fuel consumption. It is this unit
which is considered the best unit for checking fuel consumption on running services where
the loads are not constant. But this unit does not indicate the speed factor.

SFC of the locomotive is calculated with respect to its service.

For locomotives in shunting service GTKM earning can’t be recorded, hence it is not
calculated.
In electrical engine, it is called Specific Energy Consumption (SEC)...it is the amount of electricity
(in KWHr.) consumed per unit work done.

Erroneous issue of Way bills

In the case of parcels, if the way-bill shows the freight 'To-pay' and the railway receipt shows the
freight 'Paid', or vice versa, the forwarding station should be communicated before delivery to
ascertain which entry is correct.

The reply received should be attached to the way-bill. If it is found that an error has been made,
it should be adjusted as indicated below:

Balance sheet treatment

A.i. If, on receipt of a communication of enquiry from the destination station, it is found that
erroneously 'Topay' way-bill had been issued instead of 'Paid', the forwarding station should
send a certified overcharge sheet to the destination station which will take 'special credit' in its
balance sheet for the amount outstanding, and submit the overcharge sheet to the Traffic
Accounts Office, attached to the balance sheet in support of the credit entry.

ii. forwarding station should also debit itself for the amount involved by a special entry in its
balance sheet.

B. I. When a 'Paid' way-bill has been issued instead of 'To-pay', the-destination station should, at
once, send a certified overcharge sheet to the forwarding station, which should take 'special
credit' in its balance sheet to clear the erroneous debit, and submit the overcharge sheet to the
Traffic Accounts Office attached to the balance sheet in support of the credit entry.

ii. The destination station should debit itself by a special entry in its balance sheet, a remark
being made on the waybill that the freight had been collected. Fresh way-bill should not be
issued in any of the above cases.

To sum up,

The way-bill should, however, be accounted for as issued and not as it should have been issued.

The instant case comes under 'A' above.

As per the narration, it can be found that the station is forwarding station. So, as per 'A' ii above, the
forwarding station should Account for it as issued ie paid and take spl. debit.

Since cash collected, the amount will come under cash on credit side.

Destination station will Account as inward to pay on debit side and upon receipt of certified over
charge sheet from forwarding station, it will take special credit in the balance sheet.

Financial justification: DCF method

The following methods of appraisal of capital expenditure proposals are commonly used in industrial
and commercial undertakings:
(a) Accounting rate of return,

(b) Pay back period, and

(c) Discounted Cash Flow.

Of these, methods, (a) & (b) are employed without considering the time value of money. These are
also known as the 'Financial statement' methods since the calculation involves data taken from and
used essentially in the same form as in financial statements.

When time is considered, the method employed for financial appraisal is the Discounted Cash Flow
method, also called the 'Present value method', since the time value of money is the main
consideration.

DCF illustration

Rs. 100 receivable today is more than Rs. 100 receiva1ble a year hence, as Rs. 100 received today
will earn interest or profits and shall accumulate to more than Rs. 100 in a year's time. Alternatively,
Rs. 100 received today can be used to reduce borrowing thereby avoiding interest payments as well
as reducing debts by Rs. 100. Assuming that the Railways' cost of finance is its current dividend rate
(say 6% per annuam), Rs. 106 received a year hence should be worth Rs. 100 today and Rs. 100
which may be received in a year's time is worth about Rs. 94 today (actually it is worth Rs. 94.34).
Likewise, the present value of Rs. 100 receivable 2 years hence is about Rs. 89, and so on. In this,
way the cash flow for the project in any future year can be discounted to obtain the present value.

Under DCF technique, two methods are employed...i.Net Present Value (NPV) or Net Present Worth
(NPW) and ii. Internal Rate of Return (IROR). Railways use second method.

Main difference between the two is...in the former at the desired or given rate of return say 10%,
NPV of a project is calculated. If NPV is negative the project will be dropped. The rate of return will
be fixed by management based on the cost of capital to be employed in the project.

In the later method, the rate of return that the project is going to yield will be worked out by
interpolation method. The management will fix a particular rate of return and if the project yields
more than this cut off ror, the project is said to be financially viable. Else it will be rejected.

DCF technique is considered as a mathematical tool to be adopted for selecting a particular project
when many projects are competing when the capital available is limited. Therefore, Railways would
also consider projects after taking up economic evaluation in addition to financial justification.

Circular Journey Ticket.

Indian Railways provides the facility of booking Circular Journey Tickets. These tickets offer you
unique travel flexibility, as they are issued for all journeys (other than regular routes), which begin
and complete at the same station.

Circular journey Tickets can be purchased for all classes of travel. A maximum of eight break
journeys will be admissible on these tickets.
Standard Circular Journey Tickets are also offered by Zonal Railways. These cover popular
destinations for the Convenience of tourists. The details of route, fare etc., for these tickets can be
obtained from nominated stations in each Zonal Railway.

You can purchase these tickets if any one of the standard routes suits your convenience. Otherwise
you can inform the Zonal Railways about your itinerary and Circular Journey Tickets can be drawn up
to suit your requirements.

Idle time

Idle time is the time for which workers are paid, but for which they are not doing actual work. It's
basically the unproductive time of workers, for which they're still compensated.

All possible steps should be taken by management for preventing idle time because of the fact that I.
wages are to be paid for no work done, ii. it also results in huge avoidable losses in production.

The time taken up in delays and holdups, due to breakdown of service or plant or any other cause
for which the direct worker cannot be held responsible should be booked to "idle time" and all time
so booked should be carefully investigated, responsibility for the delay or breakdown located and
steps, may be taken to prevent such waste.

To record idle time, there will be an "idle time card" for each worker for each month. These cards
will depict the reasons on the reverse of the idle time cards for the analysis of idle time. These cards
will remain in the custody of time booth and will be punched on /off with the commencement
/cessation of idle time on the authority of idle time slips issued by chargeman.

Idle time cards will be signed by chargeman and countersigned by shop superintendent and sent to
the accounts office along with the job cards.

Idle time is chargeable against 'shop on cost' work order. However, idle time upto 15 minutes in
each case may be allowed to be booked against job card concerned and not accounted for as idle
time.

Idle time- reasons

(1) No power. (2) Machine repair.(3) Lack of material (4) Lack of tools (5) Waiting for work (6) Crane
repair (7) Miscellaneous.

Joining time

Joining Time is the time granted to a Railway servant on transfer in public interest to enable him to
join the new post either at the same or a new station.

No joining time is admissible in the case of temporary transfer for a period not exceeding 180 days.

Not more than one day's joining time shall be allowed to a Railway servant to join a new post within
the same 'station or which does not involve change of residence from one station to another.

Other cases: Where the distance between Hqrs to hqrs is 1000 Kms. or less- 10 days
More than 1000 Kms- 12 days

More than 2000 Kms- 15 days , except in cases of travel by air for which the maximum will be 12
days.

When a Railway servant joins the new post without availing of the full joining time, the number of
days of joining time as admissible under these rules subject to the maximum of 15 days, reduced by
the number or days actually availed of, shall be credited to hisleave account as leave on average pay.

Joining time may be combined with vacation and/or regular leave of any kind or duration except
casual leave.

The joining time will commence from the 1st date of relinquishment of charge of the old post if the
charge is made over in the forenoon; or the following date, if the charge is made over in the
afternoon.

A railway servant on joining time shall be regarded as 'on duty' during that period and shall be
entitled to be paid joining time pay equal to the pay which was drawn before relinquishment of
charge in the old post.

Operating ratio

In finance, the Operating ratio is a company's operating expenses as a percentage of revenue. In

Railways all over world, an operating ratio of 80 or lower is considered desirable.

The financial health of the railways is determined by its Operating Ratio (OR).

Operating Ratio, i.e., percentage of gross working expenses to gross earnings, (excluding Suspense).

OR the lower, the better. Operating Ratio can be decreased by reducing expenditure and
augmenting income and efficiency. It is compared for a zonal railway or IR as a whole over the years.
But, it is not a good ratio for comparison of financial performance of different zonal Railways.

Operating ratio is worked out for zonal Railways and IR as a whole. It can't be computed for Division
units, because of the fact that traffic accounts is centralised and no apportioned earnings could be
worked out Division-wise.

To know the División performance, Performance Efficiency Index is worked out. In place of
apportioned earnings, for PEI originating earnings of a división and ordinary working expenses are
considered.

Operating ratio of Indian Railways is 111 per cent for April-July period paint dismal picture during
current FY. (Which means for an income of every Rs 100, the railways spends Rs 111.51). It reflects
lower than targeted traffic growth but higher expenditure owing to increased pension liability and
operational expenses.

Inventory Turnover Ratio

Inventories of raw materials, stores and spare parts, and the value of unfinished jobs (known as
work-process) in Railways represent essential, but unproductive, Capital investment.
Efficient inventory management requires lowest stock levels with the highest service levels. This
objective is secured through budgeting for inventories after careful scheduling of deliveries
against purchases and regular monitoring of the changing needs of the indentors.

Inventory Turnover Ratio is worked out by taking Stores inventory on 31st March (stores, '
purchases', 'sales', and miscellaneous advance- capital, SAA.,) as percentage of the total issue of
stores during the year.

Here also, figure the lower , the better.

Acquittance certificate

Consequent upon introduction of ECS/EFT/ NEFT modes of payment, all cheques of such
transactions are sent directly to RBI by Books action without routing through Cash office. The bills
are collected by cash office for entering the same in the cashier's cash book on debit side. However,
the status of payment is to be confirmed by book section and posted on the credit side of PMR cash
book being the amount of liability discharged. Pay bills are returned to book section duly bringing
out the unpaid amount the position. The position of Unpaid amount solely depend on the feedback
from books action. Based on this, acquittance certificate is issued in form A. 1963 by Accounts officer
to the cashier to the extent liability was discharged.

The certificate indicates the amount and month to which the liability related. It also indicates that
the paid bills were received back from cash office and that there were no objectionable items. It also
indicates that unpaid amount if any exists, the same has been deposited in the bank duly giving
reference to the challan number and date.

Transfer certificate

Transfer certificate is a document through which all transfer transactions (either intra Railway or
inter Railway; both for debit and credit) will take place. This will be generated by the transaction
originating Railway, duly uploading all the relevant documents connected to the transaction so that
the debit or credit will be accepted by the destination unit without any delay. Once sent by the
originating accounting circle, Transfer certificate will appear in the action pane of the destination
unit for acceptance and preparing JV.

Cash imprest

It is a standing advance of a fixed sum of money to meet:

1. Petty office expenses

2. Cost of raw material

3. Emergent charges which cannot be foreseen

4. Other petty expenses.

Emergent petty advances may also be made on the responsibility of the imprest holder out of the
imprest money placed at his disposal.

The cash imprest is sanctioned by the General Manager of a Railway, or his delegated authority,
subject to the concurrence of Accounts Officer regarding the need and quantum of the imprest.

The amount of cash imprest should be the lowest possible figure calculated to be sufficient for
meeting the charges of the nature previously specified.

An officer's imprest should generally cover every branch under him.

Multiplicity of imprest should be avoided, as far as possible. If his subordinate requires petty sums,
an officer may spare a small portion of his imprest taking acknowledgements from them in the same
way as he himself furnishes to the Accounts Officer.

Separate imprests for separate subordinates should not be applied for unless absolutely necessary.

The arrangement for the safe custody of the imprest cash is the sole responsibility of the imprest
holder and he should be able and ready at all times to produce the total amount in vouchers or in
cash.

Any expenditure sanctioned for a particular purpose should be used for the same purpose and it
should not be used for any other purpose. this aspect should be seen by accounts office while
checking the imprest bill.

The account should be kept in duplicate, one copy being forwarded to accounts along with
vouchers, when amount spent reaches 80% of the imprest sanctioned. The imprest may be recouped
as and when required. Preferably it must be closed at least once a month to ensure that maximum
number of transactions of the month is accounted for.

In the internal check, normal checks are exercised on the imprest bill and expenditure is allocated to
the final heads as furnished by the executive. In case of any irregular expenditure incurred from the
imprest, then the amount should not be disallowed; ; but the same should be kept under
objectionable items register till the expenditure is regularised by competent authority.

In case cash imprest is being recouped in a month very frequently, then the executive authority may
send a proposal to finance for increasing the quantum of cash imprest giving details of expenses at
least for last six months.

Manpower planning-Benck marking

We are experiencing dynamic change in the fields of and modernisation, electrification,

computerisation, mechanisation of track maintenance etc. at fast rate to meet the challenges of
traffic requirements on Indian railways.

To meet the challenges of the changing environment, systematic manpower planning is essential.
Therefore a category-wise analysis of staff should be carried out, to identify the surplus and to
arrange manpower in the areas of need. This adjusts the surplus in one category to other categories,
where there is demand. Manpower planning ensures that the existing manpower is utilized to the
maximum extent, reducing wastage by identifying surplus pockets.

This has become essential in view of the fact that number of posts are created on IR based on
yardsticks, with finance concurrence. The yardsticks are constant and mostly fixed many years back,
which normally will not take into consideration of the dynamic changes that are taking place on
Indian Railways. The cost of Manpower on IR is considered very high. Therefore, it is necessary to
adopt dynamic system of reviewing the existing manpower and one such system is benchmarking.

Bench marking

Benchmarking is comparing continuously business processes and performance metrics to industry

bests and best practices from other organisations.

The objective of benchmarking is to understand and evaluate the current position of a business or
organisation in relation to best practice and to identify areas and means of performance
improvement.

On Indian Railways, we follow benchmarking method for manpower planning by adopting simple
mathematical tool for selected important activities by fixing parameters. Eg. In loco sheds, no of men
employed per loco (<80locos or >80locos).

Information will be collected for all such activities by Rly board everymonth.

An excel sheet with graphs will be prepared for all Zonal Rly division units and Zonal Rly are advised
of the results.

Staff on roll is compared across all zones and IR low, IR high and IR average benchmarking units are
identified.

Zonal Railways with IR high are advised to have a look at the best practices being followed on IR
average unit and by adopting them, they should strive for bringing down their average to IR Average.

By this, we will be knowing pockets of surplus manpower availability. Eg. Loco sheds with IR low,
high, or average BM figures be taken up for comparison. The loco shed with high BM figures in
manpower will then be asked to reduce manpower upto IRAverage level and surplus manpower may
be identified to needy sheds, instead of resorting to creation.

Station Pay orders

Whenever payments are required to be made at stations for staff or others, Pay orders will be
issued authorizing the station master to arrange payment. These are called Station pay orders.

Station master will pay them, take credit under vouchers in liue of cash and send pay order as
voucher along with cash remittance note.

Check in TA office

All Pay Orders received from stations should be checked with reference
1) the Pay Order is signed by an officer authorised to sign it;

2) where the sanction of the competent authority is necessary, the fact of the sanction having
been obtained is recorded; 3) it is cashed within the available dates and at the station to which
it is addressed; 4) it bears the dated acknowledgement of the payee, and in the case of
payment made to a person, other than the payee, the latter's authority for payment to his
agent is endorsed or attached to it;

5) receipt stamps, where necessary, are affixed;

6) the head of account chargeable is given; and

7) full particulars of the transaction giving rise to the issue of the Pay Order are recorded.

The amount of each Pay Order should be debited to the head of account chargeable. Those
chargeable to expenditure heads should be adjusted through the Journal Entry of Transfers
between Traffic and General Books (book transfer).

When, due to insufficiency of funds or otherwise, a Pay Order chargeable to goods earnings is
cashed from 'coaching' receipts or vice versa, the amount thereof should be transferred from
the 'coaching' to the 'goods' Balance Sheet or vice versa to admit of its being debited to the
proper head of earnings.

All Officers authorized to issue Pay Orders will send monthly to the Accounts Office, lists of Pay
Orders issued them. These lists should be used to verify the genuineness of the Pay Orders
cashed from station earnings. In the case of Pay Orders issued by the Accounts Office itself, the
counterfoils will serve the purpose.

Workshop General Register (WGR)

This is a Subsidiary Register containing details of account of all Work Orders (authority for
Commencement of Work), operated under Workshops Manufacturing Suspense Account (WMS).

Direct Labour expenditure is posted against Work Order (W.O.) from Labour Sub Ledger

Direct material cost is posted from Stores Sub-Ledger

Miscellaneous charges are posted from Misc. Sub-Ledger

Shop On Cost and General On Cost (Labour and Stores) calculated on pre-determined
percentage are posted as debits in WGRs

Proforma On Cost whenever leviable are also calculated and posted in the WGR

Total debits in respect of each Work Order under Labour Stores and On Cost charges are
struck in the WGR and transcribed to the Outturn Statements

Credits in WGR are posted from Issue Notes, Bill or Debit Schedule

Up to date total in the WGR are struck and the outstanding balances worked out.
These balances are tallied with corresponding balances in the Out-turn Statement Part-II.

The Closing Balance in the Out-turn Statement indicates the balance outstanding under
Workshop Manufacturing Suspense (WMS) Account.

Reconciliation of balance under WMS Account as per General Books and Out-turn Statement
Part-II is carried out.

Transfers- Balance sheet n Book Transfers

Transfers- head consists of "Balance Sheet Transfers" and "Book Transfers".

Under the first one, sums which are transferred from the Station Balance Sheet to the Accounts
Office Balance Sheet or vice versa, viz., amounts received with the station earnings in connection
with the out standings in the Accounts Office Balance Sheet or vice versa are recorded.

The latter head is used to record:-

1 Amounts received with station earnings but credited to the expenditure heads of account through
the Journal Entries of Transfers. Eg EMD paid at station. Such items form credits to the head "Book
Transfers".

2 Amounts paid out of station earnings for Departmental expenditure and debited to the
expenditure heads through the Journal Entry of Transfers. Eg funeral advance paid from station
earnings. These items form debits to the head "Book Transfers".

The totals under the head "Balance Sheet Transfers" will be verified with the corresponding figures
in the Accounts Office Balance Sheet and it should be seen that the figures balance each other and
that the suspense head is cleared. The totals of the head "Book Transfers'" will be verified with the
Summary of Journal Entries.

Station balance sheet

Station balance sheet is a misnomer, because it doesn't have liability or assets. It has debit, credit
and closing balance too. It in fact station account or personal account of station master.

Debit side will show the liability of Station Master for recovery of charges.The debit side may be
divided into 3 parts opening balance, current debitsTand special debits.

Credit side will show the mode of clearance liability either by means of cash, cash vouchers or any
other authorised voucher. Also, the difference between debit side and credit side is shown as Closing
Balance on credit side of the Balance Sheet Thus, the credit side of the station B/sheet is also
divided into 3 parts (1)Cash and cash voucher duly acknowledged by chief cashier (2)Special Credit
(3)Closing balance.

After this brief introduction I would like to you some practical trip tips for telling the station balance
sheet only from examination point of view:

1. In a long note book, open station balance sheet proforma on one side. The other side open small
ledger accounts for each of the Opening balance items and cash; vouchers.
2. Each item has to be posted at two places...a) i) opening balance items, while posting on debit side
of balance sheet, post on debit side of ledger account. ii) other debit items, post on debit side of
balance sheet and post in ledger account of 'cash' or 'voucher', as the case may be. Thus, you
complete debit transactions.

3. If any transaction is affecting only ledger accounts, then it should also be posted twice. But, this
time ensure that if you are posting on debit side of a ledger account, second time it should be posted
on the credit side of other ledger account concerned. For example if error sheets disputed are
admitted, then the amount should be shown on credit side of 'error sheets disputed' account and
posted on debit side of 'error sheet admitted' account.

3. Then, ledger balances should be closed; credit balance of each ledger account (pertaining to
opening balance) should be posted as closing balance in the balance sheet. Cash and vouchers credit
balances should be posted on credit side of balance sheet.

If you keep these 3 basic rules in mind, your balance sheet gets tallied arithmetically on both sides.

If not tallied, check for totals or posting of figures or principle errors.

Traffic Book

It is a compilation which collects and brings to account under the prescribed heads Coaching,
Goods and Sundry other earnings, the whole of traffic earnings of a Railway, both local and
foreign, whether accrued at stations or otherwise.

It records the progress of realisation of these earnings, the results of apportionment of traffic
interchanged with foreign Railways settlement of the balances on these accounts.

The Traffic Book consists of four distinct parts viz.,

Part A- Station Accounts

Part B-Adjustment or Division sheets.

Part C- Ledger Account of the Home line.

Part D-Abstract of Earnings and Statement of Balance.

Part- A: It consolidates the earnings of stations for the realisations of which the home Railway
is responsible.

Part –B: It deals with the net results of apportionment of traffic interchanged with the other
railways. In case of coaching traffic, figures are separately shown for passengers, luggage and
parcels traffic while in the case of goods traffic only totals are shown.

Part- C: It is the ledger account of the home Railway for traffic earnings the heads of account
being –

Traffic Account – it serves the same purpose as Demands Payable does for expenses. It links
the commercial accounts with the Government account, in detail it records the accrued Traffic
Earnings in the month’s accounts to which they pertain and watches the progress of their
realisation.

It provides figures for Journal Entry of Transfer. The grand totals under each of the heads
Coaching, Goods and Sundry Other, earnings as also under other Railways and Deposit Private
Companies should be transcribed to Part D from which the monthly Journal Entry is prepared for
incorporation in the General Books.

Foreign Other Railway account - it is the ledger account of Foreign Railways in the books of
the Home Railway. It helps in the preparation of Account Current and Transfer Certificate.

Part – D: it consists of monthly journal entry and two statements for traffic earnings and is
prepared from the figures of Traffic Book Part C.

In the Journal Entry, the transactions for the month are journalized for incorporation in the General
Books of the railway.

Only the debit side of the Traffic Account is journalized. The grand total under the column "Total
debits excluding balances" should be posted in the Journal Entry to the debit of Traffic Account, after
deducting the amount of vouchers (as this amount is accounted for on the debit side twice, once
through the Station Balance Sheet where the connected Ticket, way-Bill or Invoices Accounted for
and again through the Accounts Office Balance Sheet). The credits to the Earnings heads (X, Y and
Z), Other Railways and Deposit Private Companies should be posted from the respective column in
Part C.

Proving:

The balances under "Traffic Account," "Other Railways" and "Deposit Private Companies" as brought
out in the Traffic Book should be proved monthly with the corresponding balances in the main
ledgers.

Measurement Book

Payments for all work done by contact agencies and for all supplies are made on the basis of
measurements recorded in Measurement Books.

The measurement books should be considered as very important record. It can be produced in a
court of law if need arises. All the books belonging to a division should be numbered serially and a
register of them is maintained. Their eventual return to the divisional office is watched. They should
be carefully preserved for ten years.

Recording of measurements in open line

Inspector of Works can record all measurements including ballast measurements subject to the test
checks by AEN/XEN, but cannot record earth work sectional measurements unless they are, specially
nominated by the Assistant Engineer on considerations of competency and reliability.

Recording of measurements in construction

A. Inspector of Works and Permanent Way inspectors cannot record measurements for the supply of
ballast, pitching stones and earth work. For all other works, Inspectors of Works and Permanent Way
Inspectors in Grade I & II can record measurements upto prescribed limit, subject to a test check by
the AEN/XEN. Measurement of ballast and pitching stones, classification of ballast and measurement
for earth work will be done by the AEN/XEN.

B. For contracts where measurement of work by contractor is permitted

Railway will give contractors measurement book (CMB) with his name, by100 machine numbered
pages. CMB will be printed with a clear margin of 50 mm on the left side of page.Dy CE in charge of
the contract will handover required number of CMBs to engineer incharge for issuance to contractor
from time to time as per progress of work. CMBs will have a unique number in the register
maintained by Dy.CE. For each agreement separate accountal of CMBs is maintained.

Measurement:

Contractor's authorised engineer will record measurements in the CMB with neat handwriting
without overwriting . All connections shall be initialed no page shall be destroyed no page shall be
left blank between the measurements. Witnessing of the measurements by Railways is not
compulsory except for initial levels in case of earthwork and hidden measurements.

In an on account certificate measurement will be recorded for the item and quantities to be paid.
However, in every fourth on account contract certificate and final contract certificate the recording
of measurement for works executed shall include all items and their quantity included in previous on
account contract certificate irrespective whether to be paid or not in the current on account
contract certificate or final contract certificate.

Payment:

No payment will be processed on lump sum measurement taken except for earthwork for earthwork
every IV bill will have actual levels taken and detail calculations carried out for the work done. The
contractor will take out one extra page for processing the bill tablet and submitted to engineer in
charge duly signing day measurements. He can keep a xerox copy of the same.

In case contractor require provisional payment of on account bill, he shall submit contact certificate
for 75 % of the amount of work done. At provisional payment stage no measurement shall be
crossed.

Test checks as prescribed shall be carried out.

Once full payment is released, used sheets of CMB shall be returned back to engineer in charge for
safe custody duly crossing of measurements by finance officer and will be re-bound all 100 pages.

Fully distributed costs – Shri.Padmanabham

Fully distributed costs means that all costs including fixed costs are charged to products and services.
IR follows this system in traffic costing and unit costs are thus arrived at. Marginal costing means
only variable costs - direct material, direct labour and direct expenses and all variable overheads
including variable element in semi variable overheads are included in costing. Fixed costs are
excluded and directly debited to profit & Loss account. Make or buy decision is arrived at by the
application of marginal costing Station to Station Rate is another area of marginal costing.

All about MPA – Machine Prepared Abstract

Upon receipt of MPAs at the station, the entries in the goods deliver book are compared with those
appearing in the machine prepared abstracts. In making comparison, the basis will be goods delivery
book, i.e., entries in the delivery book should be traced into the machine prepared abstracts and not
vice versa.

After verification with the inward invoices or railway receipts, these items should be copied by the
destination station into both the copies of the machine prepared abstracts. These are inked entries.

If any items remain unticked in the machine prepared abstracts, it will be because they have not
been entered in the delivery book or because the in voice has not been received at the station.
These are called forced entries.

This final total of To-pay column and the total of undercharges as noted from the delivery book in
the machine prepared abstracts will form the debit to be taken in the balance sheet by the
destination station under the head 'Inward To-pay' and 'Undercharges' respectively.

Now coming to the problem given in the examination, I would suggest you to take the following
action depending upon the entries.

1 If delivery book total is given inked entries value is given and forced entries value is given, then
consider the values of delivery book total and value of forced entries. Omit inked entries.

2 if the MPA total is given, inked entries and forced entries value is given, then consider the values of
MPA total and inked entries total. Omit forced entries total.

3 if delivery book total is given, MPA total is given, inked entries and forced entries value is given;

then consider the total of MPA and inked entries (X) compare it with total of delivery book total and
forced entries (Y). Normally both should be tally.

However, in the examination it will not be so. Therefore take debit in the balance sheet whichever is
higher of these two ie X or Y.

Purchase Suspense

This suspense head is operated under Capital segment to record transactions pertaining to
purchases made by the Railways temporarily till they are taken to stock.

Debit side of the Purchase Account will record expenditure on purchases both direct and through
other agencies.

Credit side of the Purchase Account is posted on receipt of Accounts copy of Receipt Note,
indicating the quantity and other details.
In principle ‘Purchases’ are made first (credit to purchses first) and the ‘Payments’ follows (debit
to purchase later connecting to credit already exist), but occasionally the bills for Stores supplied
are received supported by Railway Receipt in advance, as proof of dispatch, and advance
payments to the extent of 90/95/98/100 per cent of the value of stores are to be made.

Advance payments

In such cases of advance payments, the value of stores is debited to ‘Purchase Account’ (debit to
purchase first) even though there is no credit is received. This should be an exception. When
material is received later, credit to purchases afforded by linking the dedit already existing.

Normally, in purchase account there should be no debit first (which means that it will have credit
balance), except for advance payment made.

Sales suspense

Stores code provides that during cash sales, auction sales or sales by tender, where the value of
material sold by the Railway is recovered in advance of actual issue of stores, the credit to this
account will appear first by debit to cash. If such sales are more it will have credit balance.

In other cases, i.e. direct or tender sales to other Railways or Government departments, the debit
will appear first by credit to stores for the value of stores at the sale rates. If such sales are more it
will have debit balance.

In sales account, Debit balances represent nonaccountal of Sale Issue Notes, credit not received
from concerned accounts units and credit booked to wrong allocation, besides unlinked debits
with corresponding credits.

Credits represent the unadjusted advance amount deposited by the purchasers of scrap. These
balances should have been cleared either by connecting the issue notes for sale of scrap or by
refunding the amount to the purchasers.

Cash in Transit

Stations take credit in their Balance Sheets for cash realized by them (sent to cash office or remitted
in the bank) in the month irrespective of whether it is remitted to and acknowledged by the Cashier
in that month or in the subsequent month. Such station cash for which credit has been allowed to
the Stations in one month but, which has been received in the Cash Office after the third of the
following month (usually upto 3rd cash book will be kept open to accommodate such delays) and
consequently included in the General Books in the following month, is called Cash in Transit.

The balances under Other Railways and Deposit Private Companies and under Traffic Account, will
be compared with those in General Books. Differences should exist only under Traffic Account due
to Cash in Transit.

Differences under these heads, if not covered by cash in transit, should be investigated and rectified
in the accounts for the subsequent months.

Remission order:
Demurrage wharfage charges forgone.

If demurrage and/ or wharfage charges accrued on a consignment are foregone under orders of the
General Manager or any lower authority to whom the powers in this regard have been delegated,
remission order will be sent in duplicate, to the Station Master concerned.

As Debit

Full amount of the demurrage wharfage charges accrued should be taken to debit in the station
balance sheet.

As Special credit

Credit being taken for the amount foregone.

One copy of the remission order should be sent to the Traffic Accounts Office along with the balance
sheet in support of the credit entry and the other copy retained as station record.

In Closing balance

In case the remission order has not been received and the goods were delivered on telegraphic
advice, or as per instructions of a competent authority communicated to the Station Master on
telephone or otherwise, the amount foregone should be shown as 'outstanding' in the goods
delivery book and the outstanding list.

Shri. Nageswara rao (11/8/18)

All erstwhile railway demands 3 to 13 are now renamed as SMH - Sub Major Heads 1 to 11 under
Major Head 3002 - Indian Railways Working Expenses - Commercial Lines in Single Demand 80.
Erstwhile Demand no 1 is renamed as Revenue segment (Railway Board) under Demand No 80.
Erstwhile demand 16 is renamed as Capital segment of Single Demand 80. 👍

Appropriation Bill (Shri.Padmanabham)

Appropriation bill is presented to Parliament after the budget is voted by Parliament. With the
assent of President, it becomes Grant and then communicated. Otherwise, it is the authority to draw
money from Consolidated Fund of India. Appropriation Accounts are a sort of feedback to
Parliament. How the grants voted by Parliament and appropriations sanctioned President have been
actually spent. These are submitted duly audited.

Proprietary Article Certificate

Stores procured for Railway’s operation include the items purchased under Proprietary Article
Certificate (PAC). These items are required to be purchased from a specified firm on single
tender basis and include safety and vital items and also emergency purchases.

In the certificate, the consuming department is required to certify that

(a) No other make/brand will be suitable;

(b) The firm is the only firm who is manufacturing/ stocking these items;

(c) Similar article is not manufactured or sold by any other firm which could be used in lieu.

The department is required to indicate whether the certificate was issued under item (a) or (c).

They should satisfy themselves before indenting proprietary articles that no acceptable
substitutes are available.

'C' certificate is issued for items where it is possible to certify that 'similar article' is not
manufactured or sold by any other firm which could be used in lieu. 'A' certificate is issued for
the items for which such certificate could not be issued.

Procurement of PAC items made through single tender involves high risk perception due to lack
of competition in ensuring reasonableness of rates and the process of selection of vendors.

For Signing of PAC by user department certain limits were prescribed.

Further, in SoP it is also observed that where PAC was issued for 'A', then, purchase powers are
restrictive; and where PAC was issued for 'C' ie. similar article is not manufactured or sold by any
other firm which could be used in lieu , then, purchase powers are liberal.

Scrap disposal

Steps involved:

1 Scrap arising are mainly from two sources viz., workshop and open line.

2 The scrap material will be received in the scrap depot and the same will be accounted and as per
the rates credit will be afforded to the unit from which the scrap material received.

3 Scrap depot will do the formation of Lots and the same will be entered in a lot register. There after
survey will be conducted.

4 Reserve Price for each lot is fixed.

5 Sale will take place by i.auction or ii. tender or iii.tender cum auction or iv. direct sale

6 From the successful bidder after adjusting EMD, balance bid amount plus tax is collected and
delivery order is issued.

7 Delivery will take place in the presence of ASV and RPF representative.

8 Finally, completion report will be drawn for each lot.

Apart from the worn-out and damaged parts and materials arising out of operation, production and
maintenance in the Railway system, 'scrap' also includes all items, which are no longer useful for the
purpose for which they were originally procured. All such scrap is required to be expeditiously
collected in the scrap yards and disposed off.
The scrap accumulated in scrap depots are disposed off periodically by the Stores department, by
adopting any one of the following methods: (a) Public auction (b) Tender Sales (c) Direct Sales (d)
Sales to Employees

No such sale can be effected before the scrap and other obsolete items on sale are cleared by a
Survey Committee. This committee consists of stores and technical officers who will inspect every
materials proposed to be scrapped and sold, except a few exceptions like condemned rolling stock,
turnings and borings, etc. The Survey Committee thus ensures that no material useful to Railway is
disposed off unless the same is inspected and cleared by an expert body.

For rails and other P. Way material, Engg. Department does the necessary condition report and
inspection and CTE’s sanction is obtained for disposal.

The location of scrap yards is determined largely on consideration of freight charges, space
availability and proximity to the market for disposal.

Formation of Lots: Scrap of a particular description received from different sources are placed in a
particular lot. The idea of lot formation is to accumulate economic quantity of a particular item of
scrap to be attractive to participants in auction. Therefore, a lot should not be too small. This
should also not be too large as this will restrict auction virtually to a few rich parties only, on
account of high value and will promote Cartel or Ring formation.

Lot Register: Once the lots have been formed for the purpose of auction sale, the details are
entered into Lot Register which have columns for lot No., Description, Book Rate, Approximate
Quantity, Rate secured at previous auctions, Name of the Purchaser, Rate at which auctioned, total
value of stores and remarks.

Preparation of survey sheets: Survey sheets on the prescribed proforma are prepared in which
recommendations against each item are recorded by the Secretary of the Committee and signed by
all members of the survey committee. Some items are exempted from surveying by survey
committee. These items are turnings and borings, waste paper, firewood, saw dust etc. Survey is
not required for condemned rolling stock, rails and sleepers on line for which condemnation
certificates given by Chief Work Shop Manager and Chief Track Engineer respectively are considered
adequate.

Sale of Scrap Materials:

Sale through Public Auction- By conducting public auction at regular intervals and putting the
materials in those auctions.

Sale through Tenders- By inviting tenders for the materials to be sold either through advertised
tenders or by giving tender enquiries to likely purchasers.

Direct Sale- Some materials may be sold directly at pre-determined rates to Railway employees and
other government organisations. The rates are generally based on last auction rates.

Auction Sales: Auctions are generally conducted by Agencies. On the nominated date and time,
auction is started. Depot Officer who is of the rank of J A Grade, conducts the auction in the
presence of a representative of Accounts Department. The decision to sell a particular lot during the
auction is taken by the Depot Officer. For taking this decision, he fixes a Reserve Price of each lot in
advance. This reserve price is fixed keeping in mind past sale rates, market trend and also condition
of the lot. Depot officer has also discretion to accept below the reserve price by certain amount
(normally 5%), if the bids to the reserve price are not coming and there are reasons for accepting
the bids at lower rates.

Bid Sheet: At the time of auction when the lot has been sold, a Bid Sheet is prepared which
contains details of lot No., Brief description of the lot, Quantity sold, the rate at which sold, the
earnest money realized and the total amount payable and special conditions, if any. Bid sheet is
signed by the Auction Conducting Officer, Accounts Representative, Custodian of scrap yard and the
purchaser.

Issue of Delivery Order: When the balance sale value has been paid by the purchased in full and he
has fulfilled all the other conditions of sale, a Delivery order is issued to him by the Depot Officer.
Delivery order is an authority for the purchaser to take delivery from the Scrap Yard. It specifies the
date by which the delivery is to be taken.

Sale Account:

Debit balances represent nonaccountal of Sale Issue Notes, credit not received from concerned
accounts units and credit booked to wrong allocation, besides unlinked debits with corresponding
credits.

Credits represent the unadjusted advance amount deposited by the purchasers of scrap. These
balances will be cleared either by connecting the issue notes for sale of scrap or by refunding
the amount to the purchasers.

Classification of Surveys

Various kinds of surveys are prevalent in Railways-

Traffic Survey

Reconnaissance Survey

Preliminary Survey

Final Location Survey

Traffic Survey

It is a detailed study to make a forecast of the traffic prospects to facilitate the most promising
route and category of traffic to determine the traffic facilities to be provided on existing line.

Reconnaissance Survey

This should apply to all rapid and rough investigations of an area to determine the technical
feasibility and approximate cost of one or more routes for a projected railway line from a
general examination with the help of Contoured Survey of India Maps and other available
materials without a more careful investigation of the field and by wing instruments like
Prismatic Compass, Clinometer and similar instruments.

Preliminary Survey

This is a thorough and detailed instrumental examination of the route /routes selected as a
result of Reconnaissance in order to obtain close estimate of the projected line.

Final Location Survey

Generally this is a post investment investigation to prepare working details and to make
accurate costing by dint of theodolite and/or Electronic Distance measuring instruments and by
making a report along with fuller and detailed plans and sections.

Railway Electrification surveys

Railway Electrification surveys may be classified broadly in two categories;-

a) Cost-cum-feasibility-survey as a pre-investment investigation to assist decision making: and

b) Foot by foot survey to assist in preparation of working designs and drawings for actual
construction work.

In case of urgency it may be necessary to include portions of (b) along with (a), but normally the two
surveys are taken up separately.

Sanction to survey estimates

General Manager can sanction survey estimates provided

a.the surveys are included in the sanctioned budget and

b.approved yardsticks are followed

c.remained within the amount indicated in the budget.

However, if the excess is over 20 % on the original estimate sanctioned by higher authority, it should
have the sanction of Railway Board.

Reports

1 If the investigation is a feasibility study based on Reconnaissance Survey then a Feasibility Report is
prepared.

2 If the investigation is based on Final Location Survey, the report prepared is called Project Report.

3 Techno-Economic Survey Reports are compiled based on Preliminary Engineering-cum-Traffic

Surveys for new lines and traffic facilities.
National Pension Scheme(NPS)Withdrawal Rules (shrawankumar)

Retirement is a phase of life which most of us are unprepared for, a phase which changes the basic
structure of our life cycle, pushing us towards a fresh, new start. Planning for retirement is essential
in most cases, helping us mentally prepare ourselves for the future. The Government of India
introduced the NationalPension Scheme(NPS) to provide a secure future to citizens post their
retirement. It is often observed that enrolling for a scheme is often simpler and easier compared to
exiting a scheme. This, however, is not the case with the National Pension Scheme as it has multiple
withdrawal options. Following simple basic rules ensure that withdrawing amount from your
National Pension Scheme account is as easy as the post retirement life you plan to lead.

Rules pertaining to NPS Withdrawals

National Pension Scheme withdrawal Rules vary with different rules framed for different categories
for Government sectors.

Rules for Government sector subscribers on retirement

An individual should invest a minimum of 40% of the amount in annuity, with an option to withdraw
the balance in lumpsum. You can Use NPS calculator to get an estimate of your scheme amount.

The lump sum withdrawal can be postponed till a subscriber attains the age of 70 years

In the event of the accumulated pension being less than Rs 2,00,00/-, an individual can choose to
withdraw the complete amount

Rules for Government sector subscribers who take voluntary retirement

A minimum of 80% of the amount should be invested in annuity

In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to
withdraw the complete amount

Rules pertaining to death of Government sector subscriber

In the event of a subscriber passing away before reaching retirement age, 80% of the amount in the
account should be used to purchase annuity. The onus of this lies on the nominee/legal heir

In the event of the accumulated pension being less than Rs 2 lakh, a nominee can choose to
withdraw the complete amount

An individual should invest a minimum of 40% of the amount in annuity, with an option to withdraw
the balance in lumpsum

The lump sum withdrawal can be postponed till a subscriber attains the age of 70 years

In the event of the accumulated pension being less than Rs 2 lakh, an individual can choose to
withdraw the complete amount

An individual should have maintained an account for at least 10 years

80% of the amount should be used to purchase annuity

In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to
withdraw the complete amount

Rules pertaining to death of corporate sector subscriber

In the event of death of a subscriber, the nominee can choose to withdraw the accumulated amount
as a lump sum, henceforth taking the NPS death benefits

Partial withdrawal rules

A subscriber can withdraw only 3 times during the tenure of his/her subscription

A subscriber should maintain a minimum gap of 5 years between ant 2 withdrawals. This gap can be
reduced only during medical emergencies

A subscriber can withdraw only 25% of his contributions towards this scheme

A subscriber should have been a member of this scheme for at least 10 years in order to be eligible
for partial withdrawal

Partial withdrawal is allowed only in certain exceptional cases, like education of his/her children,
marriage expenses, house construction or medical emergencies

These NPS withdrawal rules have been designed to simplify the working of this scheme, helping a
subscriber plan for his/her retirement.

NPS premature withdrawal rules – Tier I & II

NPS Tier I - Before the year 2011, there was a lock-in period till the age of 60 years. After the
committee reviewed the pension fund regulatory and development authority bill, they concluded
that subscribers should be allowed to make premature withdrawals after completing 15 years of
service in the form of repayable advances. After serving at least 25 years of service, then they can
withdraw up to 50% of their contribution to NPS. Withdrawals will be allowed in the event of
emergencies, critical illnesses and other life events that require financial aid.

NPS Tier II - For those who invest in a Tier-II account, the withdrawals permitted are unlimited.
Therefore, the NPSAccount becomes like any savings bank account. However, withdrawing money
can be a tedious process when it comes to NPS as the Points of Presence through which withdrawal
requests can be made are few in number. There is also no online portal making the whole process
longer.

Some important questions on Pension & NPS (Shri.Nageswara rao)

1) Minimum qualifying service for superannuation is 10 years.

2) Minimum qualifying service required to apply for voluntary retirement is 20years

3) 50% of Last Basic Pension or 10 months average emoluments whichever is higher is fixed as
pension/Enhanced Family Pension.
4) The quantum of Basic Pension that can be commuted is 40%.

5) 30% of Last Basic Pension or 10 months average emoluments whichever is higher is fixed as
Normal Family Pension.

6) Minimum pension/family pension as per VII CPC is Rs.9000/-

7) Maximum family pension as per VII CPC is Rs.67500

8) To be eligible for Enhanced Family Pension one should have rendered minimum

7 years service.

9) Enhanced family pension is paid for the period of 10 years in case of death in service and in
other cases it is paid upto 67 years of age of pensioner or 7 years from date of death of pensioner
whichever is earlier.

10) Fixed Medical Allowance @Rs.1000/- is paid to eligible pensioners/family pensioners w.e.f
01-7-2017.

11) Number of LAPs that can be encashed at the time of retirement is 300.

12) A person who renders less than 10 years service is given Service Gratuity.

13) Maximum years of service reckoned for calculation of DCRG is 33 years.

14) As per VII CPC maximum limit of DCRG is 20 lakhs.

15) Additional quantum of pension and family pension is paid from 80 years of age of
pensioner/family pensioner respectively.

16) To be eligible for DLI one should have completed 5 years service subject to maintaining
stipulated minimum balance in PF Account.

17) FMA stands for Fixed Medical Allowance.

18) ARPAN stands for Advanced Railway Pension Access Network.

19) IPAS stands for Integrated Pay Roll and Accounting System.

20) AIMS stands Accounts Information Management System.

21) e-PPOs stand for electronic Pension Payment Orders.

22) NPA stands for Non-Practising Allowance.

23) NPS stands for National Pension System.

24) Employees contribution recovery is made @10% of (Basic Pay+DA)

25) PFRDA stands for Pension Fund Regulatory and Development Authority.

26) PRAN stands for Permanent Retirement Account Number.

27) PPAN stands for Permanent Pension Account Number.

28) Nodal Bank of National Pension Trust is Axis Bank.

29) Withdrawal is allowed after completion 10 years service from Tier I.

30) 25% of employees contribution can be withdrawn from Tier I. It is allowed only once in 5
years.

31) Withdrawal under NPS is allowed 3 times during service from Tier I.

32) At the time of retirement of employee 60% of funds balance is given to the employee and
40% is to be invested in annuities.

33) In case of premature retirement of employee 20% of fund balance is given to the employee
and 80% is to be invested in annuities.

Classification of Stores

Stock Items-Stores which are kept in the custody of the Stores Department which are
frequently and regularly required and whose unit cost justifies incurring inventory carrying cost
associated with these items.

Ordinary stores- Stores-which have a regular turnover caused by a constant demands and which
are stocked by the stores department in its Depot.

Emergency stores- Stores which are stocked to meet emergencies but have no regular
turnover caused by a constant demand.

Special Stores- Stores required for special work and special purpose and are not stocked in
Stores Department.

Surplus Stores- surplus stores are divided into two types, Movable and Dead.

Stores which have not been issued for a period of 24 months, but will be used in the near
future are called Movable Surplus.

Stores which are not likely to be utilised on any railways within next two years are termed as
Dead Surplus.

Delayed and Late Tenders

Delayed Tenders, i.e., tender received after due date and time of receipt but prior to opening
should be dealt in the same manner as tenders received in due time.

Late Tenders, i.e., tenders received after due date and time of receipt as well as date of
opening should be opened by concerned branch officer and marked distinctly in red ink on
the envelope as well as on the tender papers.

Both Delayed and Late tenders should be included in Tenders Registers and Comparative
statement, with suitable remarks against them.
 Instructions issued by Rly. Board from time to time, for dealing with Delayed & Late tenders
should be followed by TC members.

Z B B – ZERO BASED BUDGETING (Others)

Salient Features:

1. A technique of planning and decision making which reverses the working process of traditional
budgeting.

2. In traditional budgeting (incremental budgeting), Managers justify only increases over the
previous year’s budget and what has been already spent is automatically sanctioned. No reference
is made to the previous level of expenditure.

3. By contrast, in Zero-based budgeting, every department function is reviewed comprehensively

and all expenditures must be approved, rather than only increases.

4. Requires the budget request be justified in complete detail by each Manager starting from the
Zero-base.

5. The zero base is indifferent to whether the total budget is increasing or decreasing.

6. ZBB is especially encouraged for Government budgets because expenditures can easily run out of
control if it is automatically assumed what was spent last year must be spent this year.

ADVANTAGES:

1. Efficient allocation of resources, as it is based on needs and benefits.

2. Drives Managers to find cost effective ways to improve operations.

3. Detects inflated Budgets.

4. Useful for especially Service Departments like Telecom, Railways etc, where the output is difficult
to identify.

5. Identifies and eliminates wasteful and obsolete operations.

6. Eliminates the “spend it or lose it” mentality of traditional budgets/incremental budgets.

DISADVANTAGES:

1. Difficult to define decision units and decision packages.

2.Time consuming and exhaustive.

3. Difficult to understand and communicate the budgeting because more managers are involved in
the process.

4. Forced to justify the every detail related to the expenditure. So not suitable for R&D
departments.
Material Modifications (MM)

What is a MM?

The following may be considered as a material modification to a sanctioned work:

(a) Any change in the alignment likely to affect the facilities offered to the public or likely to increase
or decrease the length of the line by over one kilometre.

(b) Introduction of any new station or omission of any station.

(c) Any alteration in the type or number of engines or vehicles provided in an estimate for rolling-
stock.

(d) A change in the layout of a yard affecting the general method of working or increasing or
reducing the number of trains that can be dealt with.

(e) Any departure from the standards of construction, if it affects the speed of trains or the number
of trains to be dealt with than contemplated originally.

(f) Any alteration in the standards of interlocking.

Sanction

To sanction of material modification estimated to cast upto Rs. 2. 5 crore in each case GM has got
full powers.

Conditions:

1 Total value of material modification in a work should not exceed Rs. 20 crore. In case of
computerization planhead, total value of material modification in a work should not exceed Rs. 5 cr
or 5% of original cost of work, whichever is less.

2 The excess or the revised cost of the estimate not go beyond the sanction powers of General
Manager.

3 A material modification estimate to cost more than Rs50 lakh but below Rs2. 5 crore each should
be certified and sanctioned personally by PFA and GM.

4 Material modifications which are beyond the competence of GM should be sent to Board with
personal concurrence of PFA and approval of GM.

Railways should exercise greater discipline in the matter of project formulation and execution and
desist from going in for additional items of work in approved schemes / projects.

Material modifications to any projects / scheme should be proposed provided there is a direct co-
relation of the same with the original scheme.

In no case would a material modification be executed on the basis of verbal or written instructions
issued by various authorities during inspections or otherwise unless the same are backed up by
formal sanction of the competent authority.
In cases where deviations from the original schemes are inescapable Board's prior approval must be
obtained by way of sanction of revised estimates/ material modifications giving full justification as to
why a new work cannot be proposed.

Overcharge Sheet

Over charges fall under two categories: i. which can be allowed by station master and ii. which can
be allowed by commercial department.

Station master can allow refund of over charges at the time of delivery in the following
circumstances:

(1) Error in rate not affected by description or condition of carriage.

(2) Error in classification

(3) Error in calculation.

Station master can take special credit towards overcharge sheets in the balance sheet.

By means of overcharge sheets the station master can discharge his liability. Overcharge sheets can
be certified by the station master on whom the debit does not lie.

Refund of over charges by commercial department

In the case of an overcharge due to

(i) error in weight, description, distance or routing of traffic; or

(ii) error in rate( base freight, discount, rebate other charges, etc.) classification or computation
of freight claimed after delivery of goods etc; or

(iii) amount twice paid, an Overcharge Sheet is prepared by the Claims Office and submitted to the
Accounts office for certification before issuing a Pay Order in favour of the person entitled to the
refund.

Checks exercised in Accounts Office

Overcharge Sheets received for certification should be checked to see that

(1) they contain all the information required by the form;

(2) the particulars shown therein agree with those in the related Invoice/Parcels Way-Bill etc.

(3) in the case of Overcharge Sheet on account of error in weight.

(i) full details of weighment are given on the reverse of the Overcharge Sheet;

(ii) where the result of weighment has been communicated by the forwarding or other station,
such Station Master's letter admitting the overcharge accompanies the Overcharge Sheet,
(iii) in case, the consignment is not weighed anywhere, certification of Commercial authority
to this effect is furnished.

(vi) The prescribed PCC if any, should be certified and furnished by the Commercial authority.

(v) Punitive charges for overloading as per extant rule have been correctly levied.

(4) where the Overcharge is the result of an error in description or routing of traffic, the correct
description of the goods etc. or the correct route has been certified by the Traffic Officer on the
Overcharge Sheet;

(5) where Commodities placed under owners risk (OR) , if charged at railway risk (RR), necessary
charges have been realised.

(6) the amount proposed to be refunded is equal to the difference between the amounts shown in
the "charged" and "should be" columns.

(7) where demurrage and wharfage charges have been foregone, the Remission Cum Pay Order
(RCPO) has been certified by the. competent Traffic authority;

(8) the Overcharge has been claimed within six months from the date of payment or the date of
delivery of such Goods at the destination station whichever is later;

(9) the Overcharge Sheet does not relate to an item already included in the list of Unclaimed
Overcharge.

Letter of Credit-LC

A letter of credit, also known as a documentary credit, bankers commercial credit, is a payment
mechanism used in international trade to perform the same economic function as a guarantee, by
allocating risk undertaken by contracting parties.

Letter of credit is an instrument to cover risk for both parties- the buyer and overseas seller.

It is a commitment by Bank.

To place an agreed amount of money at Seller’s disposal, On behalf of the Buyer, Under precisely
defined conditions.

On Railways, it is resorted to in the case of imports. Accounts office will be opening letter of credit in
the bank for this purpose.

Parties to LC

Buyer/Importer - Applicant (railways)

Seller/Exporter - Beneficiary

Buyer’s Bank - Issuing Bank

Bank in Seller’s Country

Issuance and utilisation of LC

Issuance

A purchase order will be issued for the imported stores. On receipt of information of Shipping, the
executive will advise the accounts office for initiating the process of letter of credit for arranging
payment.

Railways will apply to the bank for opening of letter of credit.( It is made by nominated Accounts
Officer of the Railway. He makes the application and the guarantee for LC to the issuing Bank.
Addressed to RBI and copied to SBI (the LC opening Bank) and the Importer (PCMM). It is a contract
between the Bank and Importer. The application stipulates conditions for discharge of L/C and
release of payment.)

Our Bank will mail the letter of credit to the bank in seller's country.

Bank in Seles country then notify the receipt of letter of credit to the foreign supplier/seller.

Utilisation

Upon LC being notified by his bank, the seller will dispatch the material to the buyer.

Shipping documents will be furnished to his bank and on the strength of letter of credit payment will
be released to the seller.

Shipping documents will then be transmitted to the local bank and the payment will be reimbursed
to the foreign bank.

Local bank will send the documents to Railways and our account will be debited.

Why LC?

If seller sends goods without payment: There is a risk of non-payment or late payment.

If buyer sends payment without receiving goods. There is a risk of non-supply or late supply.

There is a clear need for protection of interests of both the parties i.e. the buyer and the seller.
Solution is available in the form of Letter of Credit.

Pension Master

There were instructions from railway board to maintain a Pension Master for the PPOs issued on the
zonal Railway as well as for other Railway PPOs in respect of pensioners drawing pension in the
geographical jurisdiction of the designated -PFA for acceptance of pension debits and budgeting
under Abstract 13 L/SMH 11 erstwhile D13.

This is to ensure the availability of all particulars required for check of pension debits received from
public sector banks through Scrolls, every month.

From the above, it can be understood that pension master is nothing but a list of all PPOs containing
information (either soft or hard format like PPO number, bank name and account number, pensioner
or family pensioner name, basic pension, commuted amount, residual pension, date of retirement,
type of retirement et cetera) for which designated- PFA is responsible for acceptance of debits.

Zonal Railway headquarters will be the nodal agency, which shall maintain the pension master of all
the PPOs issued on the divisions/workshops as well as headquarters. However it's role will not end
there because the pensioners who retired on other zonal Railways may also settle in the
geographical area of the designated -PFA. The, the designated PFA is responsible to collect the
information of PPOs issued at other zonal Railways and add them in the pension master maintained
by that zonal Railway.

The pension master thus created will be used to check the correctness of the pension payments
made by the public sector banks upon receipt of debit Scrolls.

Of late, Railway Board realised the problems (either no data or the data being not correct or
insufficient) in maintaining the pension master in respect of all the pensioners for which the
designated- PFA is accepting pension debits. To mitigate the hardships of zonal railways, railways
were instructed to verify the pension master data (which the zonal Railways were having) with the
pension records or obtaining information from banks and after verification, pension master be
updated and thereafter, the data ported into a new web based portal called ARPAN -Advanced
Railway Pension Access Network , which is mainly designed to allow pension debit check with e-
scrolls that are going to be received from PSBs.

Railway Board have instructed that for new retirees PPO be issued in ARPAN ; and also revision of
PPOs for pre-2016 retirees in 7th pay commission shall be carried out online in ARPAN only so that
the data contained in the central pension master on ARPAN web will become authentic. This would
pave way for smooth verification of debit Scrolls with the pension master, thus proving that the
pension payments are made in accordance with the authorisation given by railways in the form of
PPO.

Umbrella Works

The general budget of union government for 2018-19 has made provisions to improve, enhance and
modify passenger amenity facilities. Projects have been sanctioned as umbrella works combining
similar works at different locations. For example,Southern Railway has been provided an umbrella
sanction of Rs 450 crore, for provision of foot over bridges, extension and raising and improvement
of platforms.

Proceedure to be followed

Umbrella works contained in the pink book 2018-19 are of two types :

i.umbrella works containing provisions to execute works on one Railway

ii.umbrella works containing provisions to execute works on more than one Railway.

A. Umbrella works under plan head 11, 14 , 15 , 31 and 35 will be finalized by Ministry of Railways.
upon receipt of communication from railway board zonal Railways will prepare DPR finally approved
works will be appearing as itemized works in the next year pink book if formally sanctioned or with
'#' if sanction to be obtained.

B. For other planheads and for works spreading over more than one zonal Railway, Addl.member
member/ PED will be the nodal directorate and will distribute the total cost and outlay provided in
the book against umbrella on need basis to each zonal railway. in subsequent year pink book the
distribution among channel Railways will be shown as different words giving reference to the
original umbrella work.

GM can sanction upto Rs50 crores and if DPR exceeds more than Rs50 crores the same shall be sent
to Rly board for its sanction. Initially general manager can sanction up to 80% of the umbrella cost.

Various works sanctioned under umbrella works, called sub- works of particular umbrella and shall
be shown separately in LAW book. Detailed estimate will be sanctioned for each individual work
separately under an umbrella work.

The division-wise distribution of both above umbrella funds will be decided at zonal headquarters.
Giving umbrella sanction thus gives flexibility to zonal railways to prioritise works and has been
adopted in Railways for the first time.

REBOOKING (inclu. Paid on charges) & DIVERSION

Rebooking:

Booking of a consignment from the original destination to any other station without taking
delivery is called rebooking.

The consignor/consignee may request for rebooking. He must apply to SM of the original
destination enclosing RR & a fresh Forwarding Note.

Original RR is cancelled and necessary remarks are made in the delivery book.

Fresh RR is prepared showing the details of original booking particulars.

"Paid on" charges and treatment in balance sheet

All charges due at the original destination (like wharfage, handling,if any etc.) are shown as
"Paid-On" charges in the rebooking RR; in addition to the freight due to the new destination.

The original destination station can take special credit for the "Paid-on" and/or "Topay" charges
by enclosing a certified copy of the rebooking RR with the balance sheet.

Where pre-payment of freight is compulsory, the freight should be collected before rebooking
through cash.

Diversion:

When the owner of goods desires to take delivery of goods at a station other than the
original destination and such delivery is arranged prior to the arrival of goods at original
destination, it is called Diversion. Delivery of consignment short of destination is also treated as
Diversion.

Diversion fee need to be paid.RR should be produced to prove the ownership of goods.

Diversion is done subject to the following conditions:

a. Wagons should not have reached the original destination

b. No detention of train due to diversion

c. Wagon should not pass over any portion already covered

d. There should be no restriction to new destination

e. Wagon should not have passed the last diverting junction

After diverting the wagon, the SM of diverting junction will issue messages to original
destination, new destination, forwarding station and divisional commercial office (which
authorised such diversion).

Certified Over charge sheet and treatment in balance sheet

SM of the forwarding station will collect the original RR and issue a fresh RR. Original booking
particulars and diversion details are shown in the fresh RR.

SM of the forwarding station will send a certified overcharge sheet to the original destination
to clear the freight outstanding, if any.

Inventory control

Following are the standard Tools for Inventory control in any organisation:

#By selective management (ABC/Vital,Essential,Desirable /Fast,Slow,Non-moving etc),

#Management by exceptions (out of stock, inactive, surplus etc.),

#Designing appropriate recoupment policies,

#Rationalisation /Standardisation,

#Value analysis,

#Codification and computerization,

#Concept of classifying materials on market availability for buffer stocks.

In order to keep inventory turn over ratio (ratio of stores balances as on 31st March {balances of
stores in stock, stores in transit, purchase suspense, sales suspense and stock adjustment account}
divided by value of stores issued during the year) at optimum level, selective inventory
management method is used on Indian Railways.
Railways classify the item in A-B-C category as well as vital, essential and desirable category.
Railways also use standardization, variety reduction and extensive computerization for inventory
management.

A-B-C Analysis

This analysis is based upon Pareto Principle according to which in many situations, majority of the
activity (say 80%) is governed by very few (say to 20%) attributes (Pateros Law). Hence, if in Stores
all the Stock items are analysed in terms of their annual consumption - usage value, major part of
total consumption value say 70% is represented by around 10% of total items (A category), 20% of
total annual usage value is controlled by 20 % of total items (B category), and remaining 10 % of
total consumption value is represented by a large number (say 70%) of small consumption value
items (C category).

This analysis is done on the computer

(a) First of all annual issue values of all the items which were issued from all the depots are added
together to find total issues (in rupees) of the Railway,

(b) Then all the items are sorted in descending sequence of their issue value on the entire Railway
(i.e. after adding issues of all individual depots),

(c) Then go on counting the items adding issue value of the items to a " cumulative issue value"
counter. When the value in this counter represents 70% of total issues after adding a particular
item, all the items from top to this item are classified as "A" category items,

(d) This is further continued and when after adding issue value of an item to "cumulative issue
value" counter, value in the counter is equal to 90% of total issues, we mark all items excluding “A”
category items to the last item as "B" category items,

(e) All remaining items are classifies as "C" category items.

For the purpose of Inventory control, "A" category items are most important. Therefore, they are
closely monitored at highest level at very frequent intervals. In Railways, their stock levels,
consumption forecast etc., are closely monitored at the level of PCMM/CMM every month.

"B" category items are better monitored at the level of CMM/Dy.CMM every quarter or every six
months. C category items are controlled at lower levels.

Stock verification of "A" category items is carried out every six months; for "B" category items every
year and once in two years for "C" category.

ABC analysis is synonymous to Always control, Better control and Control.

To achieve better inventory turn over ratio, railways intend to keep average stocks of 3 months, 6
months and 12 months of "A”, "B" and "C" category items respectively.

'Line capacity'.
The capacity of a line is expressed in the of number of trains in both directions that can run in a
given section of the line.

Line capacity of a section represents the maximum number of trains that can be passed over the
section from 00.00 hrs to 24 hours, without reducing the speeds.

From this definition, we observe that both represent the same...for understanding purpose.

However, the term to be used in examination is 'line capacity'.

REMITTANCE TRANSACTIONS

Transactions between the Railway Ministry and other ministries or States which are settled
through the Central Accounts Section of the Reserve Bank are referred to as Remittance
Transactions.

There is one central fund in the books of the Reserve Bank for the Railway ministry as a whole
and also for each railway will be available in the books of the Reserve Bank. All transactions
enumerated (with exceptions of PAO transactions and transfer transactions) will be settled through
the Reserve Bank by operating on this fund.

The total amount due to each Railway from State Government and Central Ministries other than
Railway Ministry will be advised monthly (advice of clearance) to the Reserve Bank of India Nagpur
for adjustment against the balance of other ministries.

The Reserve Bank will, on receipt of each Advice make the necessary adjustment in the accounts
of the party concerned and issue an intimation (clearance memo) both to the debtor and to the
creditor party to the transactions.

All the items included in an account received from another Accounts Officer, whether of a State or a
Central ministry, should be accepted and adjusted in full by the Railway Accounts Officer.

The following heads will be operated in the ledger for adjustment of transactions

(1) (a) Reserve Bank Suspense. (b) Remittance into banks. (c) Cheques and Bills.

(2) M-Remittances-Inter-Government adjustment accounts.

(3) Deposits with Reserve Bank.

The transactions between the Railway Ministry and the Pay and Accounts Officers which are
settled through the issue of cheques or Government drafts are referred to as Pay & Accounts
transactions.

All inter/intra railway transactions are technically known as Transfer Transactions.

BOOK AVERAGE RATE

On Indian Railways the materials procured will be received at different intervals with different
prices. So the question will arise as to at what rate the issues shall be priced. The concept of book
average rate will address this issue.

The difference if any arising out of this will be adjusted through stock adjustment account.

Book average rate (bar) is arrived at by dividing the total value of the stores with the total quantity.

The situations where book average rate is adopted on Indian Railways are enumerated in stores
code as under:

Receipts and issues of stores are ordinarily priced either-

(a) at rates which are already shown on the vouchers for such transactions as purchases or at
predetermined rates for manufactures by Railway Workshops, advice notes for return stores/Depot
transfer Receipts; or

(b) at book average rates, as in the case of receipts under Book Transfers, Department and Account
Stock Verification Sheets, and all vouchers for issue of stores except those relating to sale. However,
sale issue vouchers relating to sales to other Indian Railways and Production Units will be priced at
the book average rate.

Check before 4.8.18

V.Sridhar

Fees: - It means a payment that an employee may get from an outside source for performing service
of series of services for a private person / public body. This does not include:-

1. Unearned income such as income from property, dividends, interest on securities.

2. Income literary, cultural artistic, scientific or technological efforts if such works are not aided
by knowledge acquired by the Rly. Employee during the course of this service and income from
participation in sports activities as amateur.

No employee may undertake other than his official duties without permission of the Competent
Authority. The Competent Authority may permit an employee to undertake any work and receive
remuneration for the same, if he is satisfied that this can be done without any hampering to his
official duties and responsibilities.

Unless otherwise ordered by the President, 1/3 of any fee in excess of Rs. 400/- or if recurring, of Rs.
250/- a year received by the Rly. Servant shall be credited to Railway revenues provided that the
amount retained by the Rly. Servant concerned will not, merely by operation of this rule, be reduced
below Rs. 400/- of non - recurring of Rs. 250/- a year if recurring.

Honorarium: - It means recurring or non-recurring payment granted to Rly. Servant from

Consolidate Fund of India or State for special work performed which is occasional or intermittent in
character and involves extra labour for its performance
The sanctioning Authority shall record in writing that due regard has been paid to the general
principles as mentioned in Rule 2004 R-II and shall record the reasons which in his opinion justify the
grant of extra remuneration. Honorarium can also be paid for delivering lectures, setting question
papers, invigilation etc.

Price lists

Price lists are referred to as nomenclature lists. These are not intended for the pricing of issue of
stores but for supplying consuming departments with a list of stores showing their correct
description and identifying numbers.

Price list number

In order to recognize every item distinctly, all standard items being used on Railways, have
been allotted a code number, which is also known as Price List (PL) No. These Nos. enable
unique identification of items.

Price list rate

New stores: The price list rates for new stores should be..average book rate or current market rate
which ever is less. the average book rate is arrived at by dividing the value balance shown in the
price ledger by the quantity balance the current market rate is the last purchase price paid. when
there was no recent purchases the current market rate should be ascertained and fixed when lost
purchase price are current market rate is lower than the average book rate by 10% or more the
balance of stores in stock should be revalued at the lower rate and the difference is adjusted against
stock adjustment account.

Workshop Manufacture Stores

The price list rates for workshop manufactured stock items should be the rate fixed half yearly by
mechanical department. The average book or ledger rate will be the price list rates in force from
time to time. Necessary revaluation of balances in stock be made at each revision of the price list
rate

Credit notes

Credit notes are of many types...firm credit notes, millitary credit notes, civil credit notes, railway
credit notes.

FCN

Firm Credit Notes: Certain individuals or firms of good standing who have regular and adequate
monthly transactions with the railways are allowed, at the discretion of the railway
administration, the facility of payment of railway dues by credit notes, for coaching and goods
traffic.

When such permission is granted, the station or stations concerned will be advised of the fact with
full instructions. At each such station a complete list of persons or parties authorized to issue
credit notes must be kept with the staff dealing with the acceptance of railway dues. If the limit
is reached, any subsequent transactions should be in cash only.

MCN

Credit Notes for Military Department: Freight charges for military traffic not required to be
conveyed on military warrants will be paid by military credit notes.

Military credit notes will only be used for the despatch of goods which are the property of the
Ministry of Defense at the time of despatch and will be tendered along with the consignment.
Military credit notes will also be used for canteen stores.

CCN

Civil credit notes: The Military Engineering Service, Contracts Directorate (Disposals Organization),
A.H.O. and all Civil Departments of Government, Posts and Telegraphs Department, will use credit
note in payment of freight .

RMC

Credit Note for Railway Department: Railway officials authorized to issue credit notes in payment
of freight on railway materials booked by passenger trains and for wharfage, demurrage and
siding charges on all consignments, whether booked by passenger or goods trains.

The station staff should take particular care to see that the charges entered in the credit notes are
correct.

Credit notes are to be treated as vouchers (on credit side of the station balance sheet) in lieu of
cash.

Vouchers

The entire collection of the day, whether represented by coins, currency notes and vouchers should
invariably be sent to the cash office by the train notified to carry the cash of that station.

Military/Police warrants and others, discharged money receipts of wagon/vehicle registration fee
deposits, credit notes of private firms or Government Deportments, and

Any other voucher or authority towards expenses incurred from station earnings like station pay
orders, funeral advances etc.

In brief

Break of journey When passengers break their journey en route, the tickets held by them should
be endorsed by the Station Master of the station at which the journey is broken and later on
they can continue their journey before the expiry of time allowed. This will help them in not losing
the telescopic benefit in fares. The endorsement shall consist of the station code initials, Station
Master's initials and the date.
Demurrage means the charge levied for the detention of any rolling stock after the expiry of free
time.

Indemnity Note is an agreement executed between the railway administration and the consignee
where the Railway Receipt is lost and wherein the consignee undertakes to indemnify the railway
administration against liability for delivery of consignments to other than the rightful owner.

Non-issued tickets_When a passenger before commencing his journey wishes to change his ticket
for one of a higher or lower class, or for another station or to exchange a single journey ticket
for a return journey ticket or vice versa, or when a wrong ticket is issued by the Booking Clerk,
or when it becomes necessary to take back or cancel a card or a paper ticket of any description, the
original ticket must be marked 'non-issued' giving reasons for cancellation with dated initials.

Memo freight" is freight in a way-bill/invoice prepared from particulars available on the vehicle
labels, marks on packages, guidance, etc., in the absence of the Guard foil or Railway Receipt.

Paid-on charges are the charges outstanding at the rebooking station in connection with
consignments rebooked from that station to another. These include (beside freight) wharfage,
demurrage etc., which may have accrued at the rebooking station (ie., first destination)

Rail travel coupons These coupons are issued to mercantile firms, touring Government officials,
accredited press correspondents, news cameramen accredited at the headquarters of the
Government of India, and the members of Legislative Assemblies/Councils. The rail travel coupons
exchanged at stations for ordinary tickets should be submitted by stations to the Traffic Accounts
Office in support of the free tickets issued.

Station to station rate means a special reduced rate applicable to a specific commodity booked
between specified stations given to attract a particular commodity for rail transport.

Wharfage means the charge levied on goods for not removing them from the railway after the
expiry of the free time for such removal from railway premises. This charge is levied to act as a
deterrent for using the railway premises as a godown.

High Official Requisitions

When High Officials of the Central or State Governments entitled to reserved accommodation
travel over railways, they furnish the Station Master at the starting station with a requisition
which is in two portions. Both portions of the requisition contain a certificate which should be
signed by the Station Master after filling in the details of accommodation provided.

It should be specifically indicated whether, or not other than the authorized persons also travelled
in the same carriage/compartment The number of tickets held by such persons should be
recorded in the certificate.

The outer foil of the requisition duly signed and stamped by the Station Master will be returned to
the official, and this will constitute an authority for him to travel in the reserved accommodation
provided and will be collected at the destination station for submission to the Traffic Accounts
Office along with other collected tickets.
The inner portion retained by the Station Master will be treated as a voucher and submitted to
the cash office along with the day's earnings, duly entered in the cash remittance note.

Left luggage and cloak room ticket.

Left luggage is luggage tendered by passengers for temporary custody at stations authorized to
receive it.

In all such cases, a cloak room ticket describing the articles so tendered should be issued to the
passenger, which is printed in three foils by carbon process, viz., passenger's foil, label and
record foils. A full description of each package, as also the total number of packages, should be
given on the cloak room ticket.

When delivery is claimed, the ticket should be collected from the owner who should be asked to
sign an acknowledgement.

The charges recovered should be entered in the cash book for parcels, luggage, etc. The
collected cloak room tickets will be submitted to the Tariff Accounts Office along with the
monthly return in support of the debit taken in the station balance sheet.

[7:28 PM, 9/3/2018] +91 94910 43283: Advice of Internal check

After the check of a station balance sheet is completed, the Traffic Accounts Office will prepare
an 'advice of internal check' separately for coaching and goods traffic, and send it to the station
concerned.

The advice of internal check will compare the closing balance, as shown by the station in its
balance sheet, with that arrived at by the Traffic Accounts Office as a result of the checked
documents and returns submitted to it. The difference between the two balances will be
supported by the details working upto it.

The advice of internal check should, on receipt at a station, be compared by the Station Master
with the coaching or goods balance sheet.

All debits and disallowances advised therein should be taken to account if not already done, in
the balance sheet next to be closed irrespective of whether the connected error sheet has been
received or not. Copies of the missing error sheets should be called for from the Traffic Account
Office.

Forwarding notes

The forwarding note is a very important document, because it forms the basis of contract
between the consignor and the railway administration. Therefore,it should be carefully preserved.
It should not be sent away from the station, except when required for production in a court of
law, traffic accounts office.

There are four kinds of forwarding notes, which are in use for the booking of parcels and goods
traffic on the Indian Railways.
(i) forwarding note for dangerous goods;

(ii) forwarding note for animals or general merchandise other than dangerous goods; (iii)
forwarding note for explosives tendered by Defence Services,

(iv) General Forwarding Note. In order to facilitate the booking of regular traffic at owner's risk
rate, this general forwarding note has been prescribed.

Sundry earnings at station

Sundry earnings realized at stations consist chiefly of receipts from the sale of time tables,
unclaimed goods, station yard sweepings and other miscellaneous items, such as

(i) excess in cash ; (ii) forfeiture of registration fees for indents of wagons;

(iii) rent of buildings 'and vendors' licence fees; (iv) cost of tender forms supplied to contractors;
(v) cost of water supplied to vendors/contractors; (vi) fines recovered from vendors; (vii) sale of
grass or trees on the track;

Some amounts creditable to other services which may be sent to Station Masters by departmental
officers and others for transmission to the cash office.

The amounts forwarded by departmental officers, etc. to Station Masters for remittance, will be
accompanied by a miscellaneous receipts transmit note in duplicate. One copy will be sent back to
the departmental officer as acknowledgement.

The amount will be taken on the debit side of the balance sheet.

Closing balance-Station outstandings

The closing balance of a station coaching balance sheet consists of:

(i) imprest cash allowed to stations for the purpose of giving change to passengers purchasing
tickets, etc. This amount should at all times remain on hand and should, on no account be
used for the purpose of remitting outstanding debits, making up deficiencies, advancing wages or
for any purpose other than that for which it is held ;

(ii) admitted debits; (iii) objected debits ; (iv) Cashier's memo;

(v) other miscellaneous items including stamped Indemnity Notes unsold, time tables unsold, etc.
vi) freight; way-bills/invoices in connection with parcels/goods on hand or not to hand should be
shown, sub-divided into 'Old' and 'Current' (less than three months old); (vii) demurrage and
wharfage awaiting clearance by remission statement.

The closing balance will form station outstanding. Outstandings is classified by Stations under class
'A' and 'B':

'A' class outstandings comprise items mentioned in items (ii), (iii) and (iv); and

'B' class those mentioned in items (v) and (vii) above.

Wagon balance

Wagon balance is the net difference between the ownership and the actual holding of wagons of a
Zonal Railway, on a particular day.

Background

Daily Junction Returns(DJRs) are received in IRCA from all inter Railway interchange points. These
contain all the particulars of each wagon interchanged at that point on that day viz., wagon number,
type, owning railway, Loaded or empty.

Based on these DJRs, IRCA staff work out the total number of wagons made over to, taken over from
other adjoining railways by each railway each day. They also workout wagon balance for each
railway each day.

If a particular railway holds less number of wagons than it owns on a particular day, it is entitles to
hire charges for balance of the wagons. Conversely the railway holding more wagons than its own is
liable to pay hire charges for the excess number of wagons it holds.

The wagon is the main earning asset of the railway; but it fetches earning only when loaded and
moving. Therefore, every effort must be made to load as many wagons as possible and to keep the
fleet mobile.

Therefore, for a given daily level of loading of wagons that Division or Railway is more efficient ,
which is able to manage with a lesser number of wagons plying on the Division or its 'wagon
holding' or 'wagon balance'.

Cash remittance note

The cash and vouchers remitted by stations should always be accompanied by a cash remittance
note.

This form is serially numbered and bound in books in three foils ; one block foil and two counter-
foils. Both the counterfoils should be sent along with the cash to the Cashier (duly keeping in
cash bag) who will return the receipt foil thereof duly stamped with the office seal and signed by
him and the Cash Witness, to the station as an acknowledgement passing on the other foil to the
Traffic Accounts Office.

In the station balance sheet, the cash and vouchers as acknowledged by the cashier should only be
taken on credit side of the balance sheet.

Erasures or alterations in the cash remittance note are totally forbidden. If a cash remittance note
is prepared incorrectly, it should be cancelled and fresh one prepared.

1. General Rules & Procedure ( withe latest updated edition)

2. Advanced Accounts (withe latest updated edition)
Wagon balance (5/9/2018)

Wagon balance is the net difference between the ownership and the actual holding of wagons of a
Zonal Railway, on a particular day.

Background

Daily Junction Returns(DJRs) are received in IRCA from all inter Railway interchange points. These
contain all the particulars of each wagon interchanged at that point on that day viz., wagon number,
type, owning railway, Loaded or empty.

Based on these DJRs, IRCA staff work out the total number of wagons made over to, taken over from
other adjoining railways by each railway each day. They also workout wagon balance for each
railway each day.

If a particular railway holds less number of wagons than it owns on a particular day, it is entitles to
hire charges for balance of the wagons. Conversely the railway holding more wagons than its own is
liable to pay hire charges for the excess number of wagons it holds.

The wagon is the main earning asset of the railway; but it fetches earning only when loaded and
moving. Therefore, every effort must be made to load as many wagons as possible and to keep the
fleet mobile.

Therefore, for a given daily level of loading of wagons that Division or Railway is more efficient ,
which is able to manage with a lesser number of wagons plying on the Division or its 'wagon
holding' or 'wagon balance'.

http://www.slideshare.net/madirao7/railway-classification-of-expenditure-
rules?from_m_app=android

(Rao) Remember one point. Due to merger of railway budget, all 16 demands are subsumed into
single demand no 80. The demands 3 to 13 are called as SMH Sub Major Heads under Major head
3002. - Indian railways writing expenses commercial lines

All sixteen erstwhile demands 1 to 16 are existed please. Erstwhile Demand no 16 is called as capital
segment of Demand no 80

(Damu) All of you aware that IR has only one Demand ie., 80.

Erstwhile demands have now become Sub Major Heads.

There is no change in Minor, Sub, Detailed heads

After merger only I gave sub major head 08 for fuel. Otherwise, it would have been 10.

Demand is one only ie., 80.

There is no other demand for railways now.

Previously known D16 , is now Sub Major Head 01, Major Head 5002 for entire works expenditure.
(Pad)
There is no change in allocations. Demand 80 is to link and report to Finance Ministry. We are not
using this in CO 7 and JV.

(Pad) A contractor bill pertaining to earth work in a doubling project. 20153103 followed by work
code. Suppose it pertains to ballast in New lines: 20114403 and work code. In nut shell, you should
be able to planhead, detailed head in case of capital expenditure. Similarly, revenue demand to be
identified. Like book keeping, practice questions set on allocations thoroughly

Diesel expenditure

We knew that revenue expenditure is classified in 2 + 3 + 2 that is 7 digit module

Go to abstract H in F-II, SMH 08

Minor head 200 is for diesel traction.

Subhead 210 for cost of HSD oil

SH 220 for handling charges

SH 230 for taxes

Detailed head indicates the service.. passenger, goods etc.

The DH is 211,221,231 respectively

PU is drawal from stcok ie., 27

_So, classification for diesel expenditure on passenger service towards prime cost is

08-211-27_

Route kilometre

Distance of each gauge owned by a Railway treated as a single line kms of double, triple
etc.

Tracks crossings at stations and sidings as also the track from the centre of terminal station
to the end of the main line buffer stop are to be excluded.

Running Track kms

In addition to the route kilometerage, the extra distance of multiple tracks (i.e. double,
triple etc. tracks) is included.

But shall exclude the tracks in sidings, yard and crossings at stations.
Track kms

Here in addition to the running kms, the length of sidings, crossings at stations etc., are also
shall be considered.

For example, the distance between A and B is 97 kms. There is a double track running
between these two stations. Both stations have extra lines for crossings- a distance of 6
kms.

The route kms of these two stations is 97 kms, while the running track kms is 194 kms and

the total track kms will be 200 kms.

[10:54 PM, 9/6/2018] +91 94910 43283: Transfer of admitted debits to other station - Inter Station
Transfer Memo

The Station Master in whose books the amount is outstanding, will prepare an 'inter-station
transfer memo'. These transfer memo should be serially numbered and prepared in quintuplicate
each marked 'original', 'duplicate', 'triplicate', 'quadruplicate' and 'quintunlicate', respectively.

The original, duplicate, and triplicate copies of the transfer memo, together with a copy of the
relevant error sheet or extracts thereform, should be sent to the station to which the outstanding
is proposed to be transferred;

the quadruplicate copy should be sent to the Traffic Accounts Office and

the quintuplicate copy retained as station record.

On receipt of the first three foils of the transfer memo, the station concerned will take a special
debit in its balance sheet, returning the original copy (to the station from which debit is received)
duly accepted ;

the duplicate copy will be submitted to the Traffic Accounts Office along with the balance sheet in
which the special debit is taken and the triplicate copy retained at the station to which the debit
is transferred.

The Station Master initiating the adjustment will, on receipt back of the original copy, take
special credit in his balance sheet.

[10:58 PM, 9/6/2018] +91 94910 43283:

Objected debits admitted subsequent

As soon as an objected debit is subsequently admitted as due, the name and designation, etc., of
the employee responsible for the debit, should be advised to the Traffic Accounts Office and the
debit transferred to the list of admitted debits and cleared accordingly.
That means minus objected debit and add in admitted debit. No need to take special credit in this
case.

(Others)

[9:38 AM, 9/7/2018] +91 99266 28551: Objected debits admitted subsequent

As soon as an objected debit is subsequently admitted as due, the name and designation, etc., of
the employee responsible for the debit, should be advised to the Traffic Accounts Office and the
debit transferred to the list of admitted debits and cleared accordingly.

That means minus objected debit and add in admitted debit. No need to take special credit in this
case.

[9:38 AM, 9/7/2018] +91 99266 28551:

Transfer of admitted debits to other station - Inter Station Transfer Memo

The Station Master in whose books the amount is outstanding, will prepare an 'inter-station
transfer memo'. These transfer memo should be serially numbered and prepared in quintuplicate
each marked 'original', 'duplicate', 'triplicate', 'quadruplicate' and 'quintunlicate', respectively.

The original, duplicate, and triplicate copies of the transfer memo, together with a copy of the
relevant error sheet or extracts thereform, should be sent to the station to which the outstanding
is proposed to be transferred;

the quadruplicate copy should be sent to the Traffic Accounts Office and

the quintuplicate copy retained as station record.

On receipt of the first three foils of the transfer memo, the station concerned will take a special
debit in its balance sheet, returning the original copy (to the station from which debit is received)
duly accepted ;

the duplicate copy will be submitted to the Traffic Accounts Office along with the balance sheet in
which the special debit is taken and the triplicate copy retained at the station to which the debit
is transferred.

The Station Master initiating the adjustment will, on receipt back of the original copy, take
special credit in his balance sheet.

Advance Statement of Gross Earnings & Traffic Handled

This is one of the most important statistical statements prepared carefully. The return is
prepared for each tri-monthly period i.e. 1st to 10th, 11th to 20th and 21st to last day of
the month.

The basic documents for compiling the statement are daily trained cash cum summary book,
abstract of outward 'topay' and `paid' parcel/goods cash book. The statement is compile on
originating basis i.e. taking into account local & foreign traffic both `paid' and `topay' booked,
no apportionment of earnings is done.

Compilation

Stations submit the return to the traffic accounts office on the day following the close of
each period i.e. on 11th, 21st and 1st of the following month through commercial couriers.
On receipts of returns from stations the figures of earnings are consolidated. and advised to
the Railway Board.

This detailed statement is in two parts. Part I dealing with earnings and Part II dealing with
passengers originating.

The informations available in the statement are:

i) The period to which the statement relates Originating earnings: These figures are sent for
the current period and corresponding period of the previous period side by side for
comparison cumulative figures from 1st April to end of the period are also shown for -

a) Passenger earnings- These figures will be further split up into suburban & non-suburban
traffic - Class wise.

b) Other coaching earnings- This shall include the earnings from luggage, penalties levied for
irregular travelling, parcels, earnings from platform tickets etc.

c) Total coaching earnings ( a + b )

d) Goods earning shall show the earnings from goods earnings (e.g. siding charges, crane
charges, shunting charges, etc)

e) Other sundry earnings These shall include sundry earnings such as rent on building, excess
cash, earnings from sale of time table, retiring rooms earnings

Total earnings= (c + d + e)

No of passengers booked:

The no. of passengers booked shall be the approximate no. of passengers originating. This is
shown separately classwise. The figures should be in thousands.

Reasons for the variations:

The Railways shall submit the reasons for variations in earnings to the board with the
statement of gross earnings and traffic handled at the end of each month and not with the
statement for the 1st two ten-day period reports.

Object of Compiling the Statement

1) To know the trend of traffic & earnings 2) To co-relate the speed of expenditure with the
flow of earnings and suggest means to restrict expenditure.
(Others)

Price lists

Price lists are referred to as nomenclature lists. These are not intended for the pricing of issue of
stores but for supplying consuming departments with a list of stores showing their correct
description and identifying numbers.

Price list number

In order to recognize every item distinctly, all standard items being used on Railways, have
been allotted a code number, which is also known as Price List (PL) No. These Nos. enable
unique identification of items.

Price list rate

New stores: The price list rates for new stores should be..average book rate or current market rate
which ever is less. the average book rate is arrived at by dividing the value balance shown in the
price ledger by the quantity balance the current market rate is the last purchase price paid. when
there was no recent purchases the current market rate should be ascertained and fixed when lost
purchase price are current market rate is lower than the average book rate by 10% or more the
balance of stores in stock should be revalued at the lower rate and the difference is adjusted against
stock adjustment account.

Workshop Manufacture Stores

The price list rates for workshop manufactured stock items should be the rate fixed half yearly by
mechanical department. The average book or ledger rate will be the price list rates in force from
time to time. Necessary revaluation of balances in stock be made at each revision of the price list
rate

Liquidated damages

If the supplier is not able to supply the materials within the stipulated delivery period, then
as per law of contract, contract expires. Further extension has to be with mutual consent.
Normally suppliers request for extension of delivery date and this is examined keeping all
relevant factors in mind.

As per IRS conditions of contract, railways have right to recover liquidated damages for any
loss or inconvenience suffered by us due to delays in supply of material.

It is a sum equivalent to 2 per cent of the price of any stores, which the Contractor has
failed to deliver within the period fixed for delivery in the contract or as extended.

Shunting Engine hours

Shunting engines are allotted to yards for shunting regularly. The total time taken to perform
shunting is treated as regular shunting engine hrs.
When a train engine performs shunting before the departure of the train as originating
station or after the arrival of the train on originating station the total shunting hrs are
known as before (originating) and after (terminating) shunting engine hrs.

Enroute: When shunting is performed by a train engine during a train run at intermediate
stations, the first 15 minutes are not to be reckoned as shunting engine hrs.

But beyond 15 minutes the same is treated as shunting hrs. This is termed as enroute shunting
engine hrs.

[11:09 AM, 9/8/2018] +91 94910 43283:

Assisted Siding & Private Siding

These sidings are constructed for the use of major industries under the special agreement.
There are no differences in the procedures for booking and delivery of goods in these
sidings.

But in case of Assisted Siding, the cost of sub-structure work is borne by the siding owner
and the cost of super-structure work is borne by the Railways.

In case of Private Siding, both the costs of sub-structure work and super-structure work are
borne by the siding owner.

Sub-structure work consists of possession of land, raising of mound, construction of bridges

and culverts, etc., whereas Super-structure work consists of laying of sleepers, rails, providing
points and crossings, signaling arrangements, level-crossing gates, etc.

[11:28 AM, 9/8/2018] +91 94910 43283:

Clearance of freight outstanding

i. freight outstandings in connection with the consignments on hand will be cleared when they
are delivered on collection of the freight charges , or when special credit is taken due to the
consignment having been rebooked to another station or transferred to lost property office, or
when the parcels goods are auctioned at the station under orders of the competent authority and
the sale proceeds are utilized to clear the outstandings either in full or in part according to as the
sale proceeds cover the outstanding freight fully or only in part. The freight outstandings in
connection with the consignments delivered in the siding will be cleared when payments in
respect of such consignments are received at the station.

ii. freight outstandings in connection with the parcels/goods not received at the destination
station will be cleared as and when they are received and delivered.

iii. If the consignments are not received at the destination station due to one or other reason the
freight outstanding will be cleared in accordance with the merits of each case. For example, if the
outstanding is caused due to the consignments having been withdrawn, diverted, etc., the
outstanding will be cleared by an overcharge sheet certified by the station against whom the debit
does not lie.
If the consignments have been lost, stolen, destroyed or sold at other stations, the freight
outstanding will be cleared either by an overcharge sheet certified by the headquarters office, or
on the authority of a letter received from the headquarters office & the original letter should be
retained as station record and the duplicate copy submitted to the Traffic Accounts Office along
with the balance sheet in support of the credit entry.

iv. Freight outstandings in connection with To-pay invoices not appearing in the delivery books
but copied out therein from the MPAswand such invoices are found to have been issued to some
other station; the station at which the outstanding has been created should take special credit in
its balance sheet, sending the reply received from the forwarding station to the Traffic Accounts
Office along with the balance sheet in support of the credit entry.

Additional Post Allowance (APA)

Recommendations had been given by 7th pay commission in its report for abolition of the Dual
Charge allowance and covering the same under new additional post allowance (APA). Committee on
Allowances had accepted this recommendation and guidelines were issued recently. These are
effective from 01.07.2017.

Eligibility

i. employee formally appointed to hold the charge of the duties of a higher post in addition to the
duties of his own post, he will be entitled to draw pay that would be admissible to him if he was
appointed to the higher post on regular basis or 10% of his present basic pay per month as
additional post allowance (APA) whichever is beneficial; provided that total of basic pay and APA
does not exceed the apex pay limit of ₹225000.

ii. employee formally appointed to hold full charge of the duties of a post on similar level as his own
post in addition to the duties of his own post he will be entitled to draw 10% of his present basic pay
per month as APA, provided that the sum total of basic pay and APA does not exceed the Apex pay.

iii. No additional post allowance is paid to an employee who is appointed to hold current charge or
routine duties of additional post irrespective of the duration of the current charge.

iv. The allowance will be admissible only if the duration of additional charge exceeds 45 days.

v. This arrangement cannot continue for a particular post for more than 1 year and for a particular
employee for more than six months at a stretch. In addition there shall be a minimum gap of one
year between two such successive appointments of a particular employee.

vi. APA shall not be paid if an employee is holding additional charge of a lower level post.

[3:54 PM, 9/8/2018] +91 94910 43283:

A. List of refund of overcharges allowed to the time of delivery.

Taken under Special Credit

Overcharge due to error in rate, classification or computation of freight allowed at the time of
delivery of goods To-pay should be entered in the 'List of overcharges allowed at the time of
delivery'. These lists should be prepared in duplicate, by carbon process, separately for local and
through traffic.

At the end of the month, total of column 'Amount refunded' should be cast and special credit
for it taken in the relevant balance sheet. One copy of each list should be submitted along with
the balance sheet in support of the credit claimed and the other copy retained as station record.

B. Refund of overcharges by Principal Chief Commercial Superintendent

Taken under voucher & minus cash

These refunds include-

(i) error in weight, description or routing of traffic; (ii) error in rate, classification or computation
of freight, claimed after delivery of goods |parcels; (iii) amount twice paid; and (iv) overcharges of
'Paid' consignments.

In all such cases, the Refund branch will call for an overcharge sheet from the station collecting
the freight.When refund of an overcharge in freight or fare is found to be due, the Refund
branch will issue a pay order (refund) authorizing the Station Master to pay the specified amount
to the payee mentioned therein. The pay order (refund) will be sent to the payee and the station
on which it is drawn will be advised of the fact separately.

Pay orders, both for the refund of overcharges and payment of compensation claims, should
ordinarily be paid from the earnings and should be sent to the cash office daily, duly entered as a
voucher, along with the cash remittance note.

To sum up, it is to mention that

a) overcharge allowed at the time of delivery shall be taken as special credit and

b) refund pay orders authorised by commercial office based on the overcharge sheets shall be taken
as vouchers.

[7:08 PM, 9/8/2018] +91 94910 43283:

Job Costing in Railway Workshops

All Indian Railway workshops (except Production Units) are designed and primarily intended for
the repairs and maintenance of rolling stock and other properties required for Railway
operation.

In a large number of cases the repairs have to be carried out by using a multitude of spare
parts and fittings manufactured in advance and kept in stock for the purpose, the cost of
such spares and fittings has to be ascertained and unit cost of activities arrived at with a fair
degree of accuracy. Therefore, a system of detailed job costing of such parts/activities becomes
more or less inevitable.
Object of Job Costing

1 To compare the costs of similar articles manufactured/ repair activities carried out from time
to time in the workshops and finding out reasons for variation in costs in a workshop

2 To compare the cost of articles manufactured/repair activities carried out in the workshops
with those manufactured/done on other Railways or with the market-price of similar articles.

3 To intimate and raise debits against user departments for budgeting and expenditure booking.

Essential features Costing System of Job

Estimation in advance of the time that should be spent and the materials to be used. Systematic
comparison of the results of actual performance with such estimates. Comparison of the
standards set by technical staff with the results actually obtained.

[7:09 PM, 9/8/2018] +91 94910 43283:

Costing in Production Units:

Cost accounting is process of accounting for cost at which expenditure is incurred to the
establishment of its ultimate relationship with cost centres and cost units.

Cost of individual products or services and the profit or loss from each are to be
preplanned.

Costing refers to the techniques or process of ascertaining cost, the methods used and the
actual process of cost finding.

Techniques of Costing:

These involve two fundamental steps:

Collection & classification of expenditure according to the cost elements.

Allocation & apportionment of the expenditure to the cost centres or cost Units.

Elements of Cost:

A manufacturing organisation is concerned with conversion of raw materials into finished

products with the aid of labour and certain other services.

The elements of cost are:

Material -Direct and Indirect;
Labour -Direct and Indirect; and
Expenses or cost of service rendered, Direct and Indirect

Eg:
Prime Cost : direct Material+direct Labour+direct Expenses
-------
Prime cost
+ Factory (Works or Manufacturing Over heads viz., Indirect Material,
Indirect Labour, Indirect Expenses )
=Total Factory (Works or Manufacturing) costs
+ Administrative Overheads.
+ Selling & Distribution Overheads
= Cost of Sales
+ Profit
= Sales
[4:15 PM, 9/9/2018] +91 94910 43283:
RRSK

A fund namely ‘Rashtriya Rail Sanraksha Kosh’ (RRSK) has been created in 2017-18 with a corpus of
₹1 lakh crore over a period of five years for critical safety related works.

Accordingly, a provision of ₹20,000 crore has been made in Budget Estimates and Revised Estimate
2017-18 and also 2018-19 out of ‘Rashtriya Rail Sanraksha Kosh’ to fund essential works for ensuring
safety.

The details of works to be executed through Rashtriya Rail Sanraksha Kosh (RRSK) are as under:

i engineering: Track works, Bridge rehabilitation, Vehicular ultrasound testing system for rail/ welds,
broken rail detection system, adoption of flash butt welds & weld quality improvement etc

ii works at LCs: elimination of LC/ROB/RUB/Subways etc

iii Mechanical:Freight Design & Maintenance, Coach Design & Maintenance, Diesel Locomotive
maintenance, Crew Management and Disaster management

iv Replacement of overaged traction distribution assets, conversion of unregulated OHE to regulated

OHE, replacement of masts/portals, replacement of transformers, cables, earthing, panels, wiring
etc

The above works of asset replacement are targeted for liquidation in a period of five years.

[4:20 PM, 9/9/2018] +91 94910 43283:

SRSF

In 2001, Indian Railways had received a 17000 Crore Non-lapsable SRSF (Special Railway Safety
Fund). That fund was allocated for five years, but then was extended for seven years. It was mainly
used to renew signalling system, track renewals and for rehabilitation of bridges.

The RRSK proposed in 2017-18 budget is also on similar lines.

RSF

A Railway Safety Fund (RSF) was set up with effect from April 2001 primarily to channelize the
Railways' share of diesel and petrol cess, receivable under the Central Road Fund, for road
related railway safety works such as construction of road over/under bridges, subways and for
the improvement to level crossings including their manning, interlocking etc. The Railways get
a share of petrol and diesel cess along with two other Ministries, viz. Ministry of Rural
Development and Ministry of Road Transport and Highways. In IR two separate plan heads,
viz. Road Safety Works -LCs PH2900 and Road Safety Works-ROBs/RUBs PH3000 have been
created for budgeting, accounting and monitoring of execution of these works.

(Pad)

Safety fund has not been officially abolished. Let us check up budget documents this year.

TTEs Earnings

Objective of Ticket Checking is to ensure that every person travelling by Railway or entering
railway premises has proper pass, ticket or an authority and to prevent leakage of railway
revenue, which shall result in increase of railway earnings.

The amounts so collected by ticket checking staff are termed as TTEs earnings.

The TTE shall deposit the amount realised from EFT during the actual outward journey at
destination station for each schedule separately at any booking counter.

TTE will prepare the Cash Remittance Memo in duplicate with details like EFT No., from to
stations, Issue Date, Breakup of the total earnings i.e. fare, Penalty, unbooked luggage earnings
, grand total etc., and one copy is handed over to Booking clerk.

Booking clerk after receipt of cash shall issue a money receipt to the concerned TTE duly
feeding break up of remittance.

A periodical report of TTE remittance of a station containing Breakup of earnings in such a

manner that the remittance made appearing in the order of MR number wise irrespective of
window of issue.

A periodical report is also designed by CRIS that gives TTE wise remittance at various stations
with in the same Zone or at other Zonal railways.

D&G charges

Each estimate of major work/projects carried out in Indian Railways has provision of Direction and
General (D&G) charges to cover the cost of staff engaged and office expenses for execution of
work/project.

Railway Board has fixed yardsticks for (a) provision of D&G charges in various Works Estimates as a
percentage of estimated cost of work and (b) creation of Gazetted/non-gazetted posts indicating
the works to be handled by each post holder in monetary terms, which are called as workcharged
posts. These posts are in addition to the permanent and temporary posts sanctioned for the Indian
Railway. The yardsticks for creation of Gazetted posts including Higher Administrative Grade (HAG),
Senior Administrative Grade (SAG), Junior Administrative Grade (JAG), Senior Scale (SS) and Junior
Scale/Group “B” have been prescribed by Railway Board. The overall expenditure on work charged
establishment should be within the prescribed establishment component of D&G charges.
D&G Establishment

They are levied as a percentage to total estimated cost ranging 7.830 (min) to 13.680(max) without
block/ with block. There is fixed percentage to be adopted for each department.

D&G other than Establishment

These are worked out towards plant construction, temporary accommodation, contingency,
instruments, loss of cash/ stores etc levied as a percentage ranging from 1.30 (min)-1.45(max).

Departmental Charges

When work is undertaken by the Engineering Department for outside parties (Deposit Works)
including other railways, government department, public bodies (e.g., Municipalities, Port Trust,
etc.) and employees of the railway, departmental charges should be levied to cover the cost of tools
and plant and of establishment supervision. The charges leviable will be 12.5 percent on the total
cost of the work (wages and materials) including the cost of land, except where a rate higher than
12.5 percent is charged to governmental departments on a reciprocal basis.

The charge will be levied once only on the total outlay on a work (cash and stores) and will not be in
addition to a first charge of 12.5 percent on the value of stores.

These rules do not apply to works of road over bridges/road under bridges, taken up on Build
Operate & Transfer (BOT) basis in replacement of existing manned Level Crossings.

The General Manager may, at his discretion, waive wholly or partially the recovery of the
departmental charges leviable provided that

(a) the railway gains some advantage, not necessarily financial, by such remission;

(b) the reasons for the remission are recorded in each case and the remission is allowed with the
concurrence of the P.F. A ; and

(c) the non-incurrence of extra charges on account of tools and plant and establishment supervision
does not in itself constitute sufficient justification for the remission.

In case of assisted or private sidings, when a portion of the work is permitted to be executed by
parties, partial remission of departmental charges may be allowed.

By Shri Damodara Prasad sir on 22.08.2018

IPAS

IPAS Application software (the software for Accounts Information Management System) was
developed by CRIS on web based 3-tier centralized architecture using Java and Oracle. It brings a
common Application to all Railways on a centralized platform so that similar processes are followed
across Railways in terms of accounting practices.

A key benefit of such centralization is a faster change management and integration of effort along
with automation of processes.
IPAS application is undergoing a continuous up-gradation to achieve better efficiency, security and
safety. IPAS will provide real time access to financial transaction data across IR and will also bring
financial and fiscal discipline.

Core design of IPAS Application is same as design of PRIME/AFRES.

There are two types of modules in IPAS

Payroll: Employee Profile, Payroll, Salary, Allowances & Recoveries, Annual Increments, Income Tax,
Bonus, Cash Compensation, DA Arrear, Supplementary Bills, Traveling Allowance, Leave, Settlement,
Leave Salary, GIS, DCRG, Quarters, Electricity, Cadre (Book of Sanction), Workshop Incentive,
Loans & Advances are the working parts of payroll.

Accounts: Internal Check, Books, PF, NPS, Pension, Cash & Pay, Suspense & Budget are the working
parts of accounts.

Integrated Payroll and Accounting System (IPAS) has eliminated various hassles of manual working
and the system is brought into a centralized platform and architecture.

TIELS - Terminal Incentive cum Engine on Load Scheme

In order to improve the utilization of the rolling stock, and help customers in prompt clearance of
freight trains from their terminals, the Engine-on-Load (EOL) Scheme was introduced by the Railway
Board in July 2004. Under EOL, the train engine would remain available during loading/unloading
operation in the siding and wait on Railway’s account so as to work the train immediately after
loading/unloading operation is completed. The EOL scheme was superseded by a new ‘Terminal
Incentive cum Engine on Load Scheme (TIELS)’ effective from 1st April 2006. It was stipulated in the
said order that implementation of the scheme should be through mechanism of EOL Benefit/
Terminal incentive benefit. Some of the important features of TIELS Scheme are:

a the purpose of reduction of detention of Rolling stock in the terminals, loading / unloading free
time of block rake was reduced. For example, unloading time of Open rake (BOXN etc.) was reduced
to five hours against nine hours applicable to normal sidings.

b A financial incentive in the form of freight rebate of specified percentage for a period of ten years
was allowed to customer who helps to reduce the terminal detention by taking certain measure like,
increase in number of pay loaders /tippler, introduce round the clock working etc.

c The scheme was applicable to existing sidings only, which have been notified for charging of freight
on through distance basis. d All future sidings were to come up with EOL concept and reduced
loading/ unloading time for TIELS would be applicable without any financial benefit (freight rebate).

e A direct benefit under the scheme, freight customers were allowed for utilization of Railway’s
Locomotives during free time of loading/unloading, without paying engine hire charges.

(This scheme came under severe criticism from C&AG and there after, it was abolished. EOL is in
vougue now.)

Asset Register
Block Account

Block Account represents all the physical assets of the Railways financed from different
sources viz Capital, Depreciation Reserve Fund (DRF), Development Fund (DF) etc.

Block Account is prepared in two Parts-Part I represents the value of assets created from Loan
Capital (Gross Budgetary Support) and Part II represents the value of all assets acquired or
improvement cost of the assets replaced from Railway’s own generation of funds (DRF, DF, and CF)
including Loan Capital.

Block Account is prepared under the various Plan Heads reflecting the classes of Assets and details of
assets acquired, constructed or replaced. It exhibits figures of total expenditure to the end of
previous year, expenditure during the year, total expenditure to end of the year and source of fund.

Value of Assets created in IR at the end of 2015-16: ₹4,31,537.88 crores.

Exhibition under Balance sheet

Balance Sheet of IR depicts Block Assets at their original cost and not at depreciated value. It
is, however, reduced from its account at the time of replacement/renewal or condemnation
without replacement. Thus, the value of block assets as depicted in the Balance Sheet did
not represent the true written down value of the assets.

Asset Register

In order to prove the value of assets, an Assets Register (as per Para 1720 of Engineering code)
is to be maintained wherein the investment cost of all projects should be docketed.

In case of projects executed by the Construction Organisation, the Assets Register should be
handed over to the Open Line Organisation (i.e. Division) for retention as permanent record.
There are different kinds of assets in IR viz Track, Buildings, Rolling Stock, Machinery, Bridges,
Signalling and Telecom equipments, Medical equipments etc. These entire assets are to be
brought in the Assets Register by the departments concerned.

Recently, IR had taken up a project on Accounting Reforms for implementation of practices

which are in line with the commercial accounting and reporting.

Excess fare returns are prepared by the Travelling Ticket Examiners immediately after the close of
each month and submitted to the Traffic Accounts Office along with the 'Accounts' foils of the
excess fare tickets. The amount remitted shall be taken as debit in the station balance sheet.

Marshalling yard

Marshalling yard comprises of a set of lines where goods trains from different directions are
received stabled, the loads are broken, marshalled and sorted out according to the various
directions to which the same are to be despatched.
 Outward loads are subsequently formed and despatched as trains. The inward loads are
kept after receipt pending placement at the various outlying points.

Marshalling yards are the clearing houses for goods wagons which are received, stored and
despatched. Marshalling yards are the hearts that pump the flow of commerce along the
track.

The necessity of marshalling yard is obvious as neither goods traffic can be loaded in full
train load nor a goods train be despatched from one end of the Rly to the other, to
whatever distance. Long distance goods train may be formed, it has to be broken out at
some stage.

Now, this is no longer valid, with the introduction of train load concept.

Normally goods sheds, transhipment sheds, departmental siding, terminal yards & other
sidings are treated outside the marshalling yard.

Terminal yard

Terminal yard is an yard situated at terminal station. Either marshalling yard or terminal yard is an
impediment to achieve quick turn round of wagons, as tendency is to stable wagons/trains at these
yards.

Terminal yards are the yards situated at the stations which are terminals for a large no. of
wagons received and loaded and from where bulk loading also take place as originating
traffic. Many statistics are compiled for record of detention to wagons in goods terminal
stations. However, the no. of wagons and total detention to such wagons placed in the
terminal yards, for want of room in T/yard should not be treated as detention at terminal
yards.

Salary bill

Check of salary bill

The internal check of pay and allowances should be conducted on the basis of the information given
in the Memorandum of Differences (MoD) and the List of Absentees which accompany the bills.

Extent of Check A complete check should be applied

-to the details in the Memorandum of Differences

-in regard to the entries under the column “gross pay and allowances claimed” in the bills, to only
those as are affected by the Memorandum of Differences,

-to the entries in the other columns of the bills;

-to the admissibility of increments drawn with the Statement of Increments

-to all calculations and totals.

Detailed Check The detailed check should be carried out with reference to the following

(1) For new posts – Sanction to the post. This should be communicated to the Accounts Officer by
the sanctioning authority

(2) For first appointment to Railway Service

-Order of appointment.

-Certificate as required by rule (or a certificate from the departmental officer to the effect that a
health certificate has been obtained).

-Report of the date of birth, duly supported by authentic records, if required under the rules (or a
certificate from the departmental officer about the date of birth).

(3) For transfer

–Last-pay certificate.

-Reports of dates of giving and taking over charge.

(4) In case of leave –

(a) Sanction to the leave, and statement of its nature and extent.

(b) Admissibility of the leave-salary claimed under the rules applicable to each case.

(5) In the case of promotion, increment or any new claim – Sanction of competent authority.

Check of Recoveries.

The Accounts department is responsible for seeing that all sums due to be recovered from the pay
of a railway servant are correctly recovered.

In view of recent fraud that took place in Delhi division of Northern Railway the following further
instructions were given by Railway Board:

A few validations and mis reports that are available in IPAS program are as under:

IPAS-Access by the paybill preparing department:

-addition of new employee in ipas requires confirmation by a gazetted officer.

-mis report on Memorandum of difference

-mis for monitoring different allowances which can give a report of top earners

-mis on new employees in payroll system.

Access by the Accounts department:

i. At the time of Bill passing the system shows variation to the various fields as listed below:
-number of employees in previous month

-number of employees in current month

-number of employees moved into the bill unit

- number of employees moved out from the bill unit

ii. Details of the employees in current month as well as in previous month : name, designation,
payment mode, Bank account number, Level, basic pay, deductions, net etc). Any variation from
previous month is shown in red colour.

Other aspects

i Users may be sensitized not to share the credentials with other employees to avoid misuse

ii Users should see their login history to ensure that their user id and passwords are not being used
unauthorisedly

iii High value allowances are to be confirmed by supervisor or higher official. Limit of each allowance
may be decided by the branch officer based on which necessary validations can be built in ipas.

iv All critical reports such as Memorandum of difference, mis on the new employees should be
thoroughly checked each month by the branch officer.

v Salary bill passing module is required to be linked to book of sanctions (BoS) and differences be
investigated immediately. The BOS should be updated continuously.

vi Ipas has provision of second level authentication through OTP which is sent to the user registered
mobile and email. This is now optional, but it can be made mandatory on the advice of PFA

vii Verification of current employee in IPAS may be made as per the extent procedure to rule out
existing ghost employees on any other accounting unit, if any.

viii Wherever possible respective moduls already optional in ipas should be used for filling the details
of allowances. For example TA, OTA, running allowance etc., by the concerned units to which the
employees belong, to ensure that the allowances are genuine and sanctioned by the competent
authority.

[9:31 PM, 9/18/2018] +91 94910 43283:

Rail Subsidies

A subsidy is a benefit given by the government to remove burden on economically weaker sections
of the society.

Many countries offer subsidies to their railways because of the social and economic benefits that it
brings. Subsidies, by definition, are generally meant only for those who cannot afford basic services.
In Railway context, there are the costs foregone by IR by charging / fixing tariff of a particular
commodity or class of travel below the cost of operation.
Indian railways are incurring nearly Rs 33,000-crore per annum subsidy burden in annual passenger
fares.

The railways efforts to subsidise passenger fares and freight rates on food and other important
products has jacked up freight rates (cross subsidy) on other products that it has adversely impacted
on the ratio of passenger fare and freight rates.

In order to make passengers aware of the subsidy burden on the fare, the railways had started
printing — “Indian Railways recovers only 57% of cost of travel on an average” — on computerised
tickets although the current accounting system does not give the exact cost.

[10:18 PM, 9/18/2018] +91 94910 43283:

Loans - Railways

Indian Railways has been executing required works with gross budgetary support from General
Exchequer (also termed as grants), internal resources, IRFC borrowing, Institutional financing and
through other modes of financing as per requirement and feasibility.

The budgetary support is in the shape of a perpetual loan on which the Railways used to pay
dividend. With the merger of rail budget with general budget wef 2017-18, payment of dividend
stands abolished.

Loan, as opposed to budgetary support, is taken from union Government to tide over temporary
requirement of money to meet commitments, instead of resorting to going to parliament. Indian
Railways took a loan of Rs 3,000 crore in 2011-12 and repaid with interest in 2012-13. Thereafter , IR
didn't take any loan from general exchequer.

Productivity Test

It is important that an investment proposal is subjected to proper financial appraisal not only before
it is a sanctioned but also a certain period of time after the project has been in operation. Whether
the financial return anticipated from a project at the estimate stage is actually realised in due course
or not is determined by conducting a ‘Productivity test’ in respect of all major works.

Para 243 of Financial Code-Volume-I stipulates that a post project appraisal is necessary to find out
if the financial return anticipated from a project at the estimate stage was actually realized in due
course. This is accomplished by conducting a Productivity Test for all major works.

In respect of each New Line opened to traffic, the Railway Administration will submit a statement to
Railway Board showing the financial results of its working in Form F-244. For any such comparison
to be meaningful and realistic, it is important that the calculation of the actual additional earnings
and working expenses is done on the same lines as at the project estimate stage.Such a comparison
should also preferably be done classwise in the case of passenger traffic and commodity-wise in the
case of goods traffic. It should also bring out the probable traffic prospects of the line in the sixth
and the eleventh year of opening.
[10:24 PM, 9/19/2018] +91 94910 43283:

GeM

Public procurement forms a very important part of Government activity and Government e-
Marketplace (GeM) is a very bold step of the Government with the aim to transform the way in
which procurement of goods and services is done by the Government Ministries/Departments, PSUs
etc. Procurement made smart with GeM.

Two Groups of Secretaries recommended setting up of a dedicated e-market for different goods &
services procured/sold by Government/PSUs besides reforming DGS&D.

DGS&D with technical support of NeGD (MeitY) has developed GeM portal for procurement of both
Products & Services. The portal was launched on 9thAugust 2016. Procurement on GeM has been
authorized by General Financial Rules.

GeM is a completely paperless, cashless and system driven e-market place that enables procurement
of common use goods and services with minimal human interface.

Benefits:

#Transparency: GeM eliminates human interface in vendor registration, order placement and
payment processing, to a great extent.

#Efficiency: Direct purchase on GeM can be done in a matter of minutes and the entire process in
online, end to end integrated and with online tools for assessing price reasonability.

#Secure and safe: GeM is a completely secure platform and all the documents on GeM are e-Signed
at various stages by the buyers and sellers.

# Provides potential support to Make in India

#Savings to the Government: The transparency, efficiency and ease of use of the GeM portal has
resulted in a substantial reduction in prices on GeM, in comparison to the tender, Rate Contract and
direct purchase rates. The average prices on GeM are lower by atleast 15-20%, and in some cases
even upto 56%.

[10:26 PM, 9/19/2018] +91 94910 43283: All vendors supplying common use goods and services to
Railways are advised to get themselves registered with GeM portal (www.gem.gov.in) for availing
business opportunities offered by GeM.

Terminal Tax

Terminal tax is collected by the railway administration on behalf of municipalities and the levy is
imposed on inward and outward parcels and goods in accordance with the rates embodied in the
terminal tax schedule of the municipality concerned.

The amount collected should be accounted for in the cash, in delivery books. Articles on which
tax is leviable on ad valorem basis, their value and the amount of tax to be recovered will be
assessed by the municipal staff and indicated on the railway receipts.
The terminal tax collections should be remitted to the Cashier daily along with the traffic earnings,
showing the amount separately under the head "Municipal dues". The total amount so collected
is accounted for in the daily trains cash-cum-summary book and taken as a special debit in the
monthly balance sheet.

The receipts are machine numbered and supplied to stations in sets of three foils in book form.
Separate receipt books are used for inward and outward traffic, the foils being prepared by carbon
process. The first foil is sent to the Traffic Accounts Office, the second is given to the payer and
the third is retained as station record.

A statement of terminal tax collected on parcels and goods will be prepared by stations in
duplicate by carbon process, separate forms being used for inward and outward traffic. Entries in
the Statements are made from the terminal tax receipts issued. One copy of the statement along
with 'Accounts' foils of terminal tax receipts is submitted to the Traffic accounts office at the end
of the month, and the other copy of the statement will be retained as station record.

Check in TAO

should be seen that all the Receipts issued during a month, irrespective of the month to which the
transactions relate, have been correctly accounted for in the Statements of Terminal Tax and that
the rates charged for different commodities shown in the statements are in accordance with the
authorised schedule of rates. The total of the statements should agree with the debit taken to
account by the station in its Balance Sheet.

Types of stores contracts

Rate Contract

These are generalized contracts entered into with suppliers for a specified period of time
(normally 1 or 2 years) for specific items identifying all terms & conditions including the
price.

So, in this contract rate is fixed, but quantity and consignee are not identified .

These contracts authorize, supply orders being placed by nominated officers for specific
quantities to be supplied to specific consignees on the rate contract terms and conditions and
price, without the need to go through the whole procurement procedure. Thus, the rate
contracts save lot of time in routine purchase work.

If the agency gets orders for lesser

quantities than anticipated, it cannot claim any damages.

Running Contract

In rate contracts, suppliers are not sure of order quantities . Some estimate of quantity to be
purchased is provided in the contract.
 Therefore, if in a contract entered for a specific period of time, like Rate Contract, if we give
an indication of minimum quantities to be purchased, the Contract is known as running
contract . Generally running contracts have liberal quantity tolerance clauses according to
which quantities can be increased or decreased by 25 to 30%.

For running contracts also separate supply orders for actual drawal of the materials are
required to be placed.

Fixed Quantity Contracts

In these contracts all the terms and conditions including rate, quantity in definite terms,
consignee and delivery period/date are specified at the contract stage itself.

The contract is generally not spanning over a long period like Rate/Running Contract and no
subsequent supply order is required to be placed.

These contracts lack the flexibility of Rate & Running Contract but contract administration is
easy.

In Railways, most of our contracts fall in this category only (issue of purchase orders).

Composite contract

A composite contract is one which cannot be splitted ie., inseparable and indivisible. Also it involves
sale of goods as well as providing of services.

A supply of goods and/or services will be treated as composite supply if it fulfills the following
criteria:

* Supply of 2 or more goods or services together AND

* It is a natural bundle, i.e., goods or services are usually provided together in the normal course of
business.

* They cannot be separated.

GST in such contracts will be at the tax rate of the principal supply on the entire supply.

Strategic contract

Strategic contracts involve a long-lasting, mutually beneficial partnership.

Strategic collaboration enables maximal leverage of the resources of each partner.

Ultimately, startups, small companies, and mid-sized firms are likely to benefit from making the right
strategic contracts, as the support will enable them to tap into new areas and/or expand on their
existing objectives.

For example, Cement markers are signing long-term freight contracts with Indian Railways (IR) can
be viewed as strategic contracts, that would help the IR reverse the recent trend of a decline in
cement loading and allow manufacturers of the binder to cut operating costs significantly.
Similarly, Gati has entered into lease contract with Indian Railways for transporting shipment
through parcel trains in various sectors. This also can be termed as strategic tie up.

[2:54 PM, 9/21/2018] +91 97948 65840:

Please give the details of GST adjustment in balance sheet for book keeping

[3:18 PM, 9/21/2018] +91 94910 43283: i. There will be no impact on the Profit and Loss account.

ii. However, if there is any GST paid for which input tax credit is not allowed then it should be
booked as expense and thus reducing the profit. (as in case payment is for an expense)

iii. The tax liability or positive input tax credit is to be shown as liability or asset in the balance sheet.

iv. Fixed assets on which input tax credit is allowed and taken are to be shown as cost excluding gst.

BOLT-(Build-Own-Lease-Transfer)

With IR's funds position being very tight and the need to augment capacity urgent, the railways
stepped up its drive to invite private-sector participation almost two decades back. BOLT is one such
scheme.

Under the scheme, called BOLT, (Build-Own-Lease-Transfer) private bidders build fresh capacity
since they own it, they collect lease rentals and finally transfer it to the railways after a specified
time. BOLT has been proposed for track doubling, electrification, gauge conversion and addition to
rolling stock.

However, the railways will have to pay the BOLT bidders an annual sum that ensures a return of 16
per cent on their investment (whereas the returns for the BOLT scheme varies between 12 per cent
and 14 per cent)- this is one of the features of the scheme this will put an undue burden on their
already-strained budgets.

The poor response to the scheme has been attributed to the high-cost quoted by builders and
inadequate response to the scheme.

This scheme is a failure on IR.

Cancelled tickets are of two types... cancellation of unreserved tickets and reserved tickets.

A. When unused unreserved tickets are surrendered within three hours after actual departure of
the train on the date of issue, the tickets will be endorsed on the back as 'non-issued' and the fare
refunded after deducting the clerkage charges due, giving reasons for the non-issue of tickets in
cases where clerkage charges are not collected and full fares are refunded.

The clerkage charges for local and through traffic separately, will also be shown under a distinct
head 'Clerkage' in, the daily train cash book-cum-summary.

B. When refund is granted on unused reserved tickets after cancellation, the particulars of refund
will be recorded in a statement prepared in quadruplicate by carbon process separately for local
and through traffic. The net amount refunded will be shown as a 'deduct' entry in the daily train
cash book-cum-summary under the main head 'vouchers'.

In the station balance sheet also refund on advance booked tickets, will be shown as voucher and
minus cash.

Diff bet ABC & VED Analysis

There are many types of inventory control techniques. ABC analysis and VED analysis are two of
those techniques. They fall under selective management techniques.

I had already explained about ABC analysis.

Under ABC analysis stores held in stock will be classified based on the average annual consumption.
However, this alone will not suffice for effective inventory management. For example, crankshaft
which is most important item in a Loco will have the average annual consumption of one or two.
However, if this goes off the Loco will come to stand still. This item will fall under C category as per
ABC analysis.

As such, it was held that the ABC analysis should be coupled with other type of analysis based on
the importance of the component. Under this technique, the stock items will be classified as vital,
essential and desirable. Hence the name, VED analysis.

Classification done on the basis of criticality of the item is as Vital, Essential and Desirable.

Vital items: are those items which are very critical for the operations and do not permit any
corrective time i.e. they cannot be procured off the shelf if they are not available.

Essential items :

These are comparatively less vital and work without them cannot be managed for few days.

Desirable items: All other items are classified as desirable.

This improves the satisfaction levels of the consuming department as well as the service levels of the
stores department.

Tackling the items on the basis of their consumption value and also criticality improves the
service to the customer as well as we are able to control the inventory.

[8:24 AM, 9/26/2018] +91 94910 43283:

Refund lists

Overcharge due to error in rate, classification or computation of freight allowed at the time of
delivery of goods or parcels are entered in the 'List of overcharges allowed at the time of
delivery' or 'Refund list'. These lists should be prepared in duplicate, by carbon process.
At the end of the month, total of column 'Amount refunded' should be cast and special credit
for it taken in the relevant balance sheet.

One copy of each list should be submitted along with the balance sheet in support of the credit
claimed and the other copy retained as station record.

So, take special credit.

[8:36 AM, 9/26/2018] +91 94910 43283:

Refund Pay orders... issued by commercial branch on the stations, based on certified over charge
sheets. Such pay orders upon refund shall be taken as vouchers and minus cash.

On paid on charges, I had already provided notes. Also please note that paid on charges will come
only in case of

i. Rebooking and

ii. Articles sent to Lost Property Office.

I am repeating it here:

REBOOKING (inclu. Paid on charges) & DIVERSION

Rebooking:

Booking of a consignment from the original destination to any other station without taking
delivery is called rebooking.

The consignor/consignee may request for rebooking. He must apply to SM of the original
destination enclosing RR & a fresh Forwarding Note.

Original RR is cancelled and necessary remarks are made in the delivery book.

Fresh RR is prepared showing the details of original booking particulars.

"Paid on" charges and treatment in balance sheet

All charges due at the original destination (like wharfage, handling,if any etc.) are shown as
"Paid-On" charges in the rebooking RR; in addition to the freight due to the new destination.

The original destination station can take special credit for the "Paid-on" and/or "Topay" charges
by enclosing a certified copy of the rebooking RR with the balance sheet.

Where pre-payment of freight is compulsory, the freight should be collected before rebooking
through cash.

Diversion:

When the owner of goods desires to take delivery of goods at a station other than the
original destination and such delivery is arranged prior to the arrival of goods at original
destination, it is called Diversion. Delivery of consignment short of destination is also treated as
Diversion.

Diversion fee need to be paid.RR should be produced to prove the ownership of goods.

Diversion is done subject to the following conditions:

a. Wagons should not have reached the original destination

b. No detention of train due to diversion

c. Wagon should not pass over any portion already covered

d. There should be no restriction to new destination

e. Wagon should not have passed the last diverting junction

After diverting the wagon, the SM of diverting junction will issue messages to original
destination, new destination, forwarding station and divisional commercial office (which
authorised such diversion).

Certified Over charge sheet and treatment in balance sheet

SM of the forwarding station will collect the original RR and issue a fresh RR. Original booking
particulars and diversion details are shown in the fresh RR.

SM of the forwarding station will send a certified overcharge sheet to the original destination
to clear the freight outstanding, if any.

Unsolicited offers

Offers of firms not registered for the specific trade group of items notified in the limited/ bulletin
tender enquiries are considered unsolicited and rejected as a general rule.

However, in exceptional cases where there is not enough competition from the registered suppliers,
the rates quoted by registered firms are unreasonably high, the material is urgently required and
where re-tendering may not help Railways, the suitable unsolicited offer may be accepted with
required security deposit upon confirmation of capacity cum capability of the firm and rates received
are reasonable.

Supplementary Grant vs Excess Grant

Supplementary Grant

When grants, authorised by the Parliament, fall short of the required expenditure, an estimate is
presented before the Parliament for Supplementary or Additional grants.

Ministries are asked to try and meet their additional funding requirements through internal savings
first and seek the minimum additional requirement needed by means of supplementary demands for
grants.
These grants are presented and passed by the Parliament before the end of the financial year.

This exercise is carried out based on the projections of Revised Estimates.

Excess Grant

When actual expenditure incurred exceeds the approved grants of the Parliament, the Ministry of
Finance and Ministry of Railways presents a Demand for Excess Grant. The Comptroller and Auditor
General of India bring such excesses to the notice of the Parliament by examining Appropriation
Accounts.

The Public Accounts Committee examines these excesses and gives recommendations to the
Parliament. The Demand for Excess Grants is made after the actual expenditure is incurred and is
presented to the Parliament after the end of the financial year in which the expenses were made.

Inventory Turnover Ratio (ITR)

This is a measure of average stocks held in stock at a time. Efficiency with regard to
optimum stock levels is measured by working out inventory turnover ratio on every 31st
March. This is measured in percentage by the following formula-

ITR = Average value of stock of all materials held in stock as on 31st March /Total value of
issues made during the year

In Railways, Stores Balances are reflecting in various capital suspense head e.g., Purchase
Suspense, Sale Suspense, Stock Suspense.

As per accounting system for working out inventory turnover ratio, we divide debit balances
outstanding in all above suspense heads on 31st March of the year by total issues made from
1st April to 31st March. This ratio is multiplied by 100 to get percentage.

In Railways, this is computed with fuel and without fuel seperately.

As overstock and inactive items are not contributing towards inventory turnover, we should
control their balances. Total balances of inactive stores (items not moved for past 12 months
or more) and overstocks should be kept low.

In order to keep inventory turn over ratio and compliance figure at optimum level, selective
inventory management method is used on Indian Railways.

During 2016-17, the Turn Over Ratio -the main efficiency indicator for Inventory Management-was
9% (without fuel) and 8% (with fuel).

Inventory as on 31.03.2017, (without fuel) held by the Stores Departments on Indian Railways as a
whole was Rs2,188.41 crores (Rs2,753.23 crores with fuel) during the period against total issues
of Rs24,011.38 crores (Rs34,757.21 crores with fuel).

Memo Delivery

After unloading, entry is done in unloading book and is connected with invoice.
Where invoice is not available/ received, then as per railway marking on packages, a memo
will be prepared and entry will be done in memo delivery book. Therefore on presentation of
Railway receipt, entry will be done in delivery book and delivery will be granted. In case
there is no marking on packages and Railway receipt is not produced, delivery will be granted
on the basis of indemnity bond.

In case of perishable goods of there is no marking on packages, Railway receipt is not

produced and invoice is not received, cost of goods will be collected and then delivery will
be granted. Separate money receipt will be issued to party. On presenting the railway
receipt, the amount will be refunded.

Open Delivery

Open delivery will be granted in when

Packages found in broken condition, damaged condition, torn condition, loose condition while
granting partial delivery.

Railway administration is empowered to grant open delivery as per provisions of section 81

Indian railway act.

Open delivery is granted by commercial Inspector/Section Master of by competent commercial

officers if their powers are exceeded.

Presence of R.P.F. is mandatory. Damaged packages will be reweighed and entry will be done
in re weighed register. Before opening the packages remark regarding compliance of external
packing conditions should be passed in the report. Packages should be opened from the side
they are broken. After opening the packages remark regarding compliance of internal packing
conditions should be passed in the report. It will be checked as to whether there was
sufficient space in the package to accommodate the missing contents. Goods will be tallied with
invoice.

If mis-declaration is detected, penalty as per rules will be collected. On tallying actual contents with
beejuck, extent of damage is evaluated. Cost of missing / damaged goods is calculated according to
beejuck rate. Open delivery report will then be prepared.

Its very motivating me sir, honestly speaking till now I am not able to spent more time for the
preparation because of my work pressure but I have the will to clear the exam and you all shown me
the way sir. Now the ball is in my hand. I’ll definitely try my level best sir…

Dunnage

Dunnage is inexpensive or waste material used to load and secure goods during transportation

Wherever, under the tariff rules, loading is required to be done by the owner and provision of
dunnage (crushed Sugarcane, Paddy husk etc.) is required, it should be seen that dunnage is
provided by the owner in accordance with the instructions laid down.
Wherever these instructions have not been compiled with by the consignor, the booking should
be done only when the consignor passes remarks of non-compliance on the forwarding note.

Dunnage is a Special Packing Condition.

It comes under S-2. For Food grains and pulses – Each door of wagon should be protected
with dunnage (crushed Sugarcane, Paddy husk etc.) bags by the consignor. The dunnage will
consist of 12 bags of standard size for 8-wheeled wagons, to be placed 3 on each of flap
door. The bags should be stuffed with suitable material such as crushed sugarcane, paddy
husk or straw. The bags shall be placed in a vertical position side by side so as to fully
cover up the flap-door services.

In case of non-compliance of above condition, suitable remarks should be made by the

consignors in the Forwarding Note, which should be reproduced in Railway Receipt also.

Add suspense to Gross Earnings to get Gross Receipts is very important.

So, in the examination if Gross Receipts and suspense are given, you have to find out Gross Earnings
by subtracting suspense from Gross Receipts.

This concept was clearly explained in this AV presentation.

As per A-II, error sheets are accounted under special debit.

Other items normally categorised as special debits are ....

Special Debits

#Reweighment charges should be accounted for as a special debit

#Arrear undercharges should be accounted for as a special debit

# The charges, if any, for realizing the amount of the draft, as notified by the railway
administration, are included in the amount of the draft; these charges should be accounted for as
a special debit.

# Errorsheet (Admitted) amount remitted at the station at which the employee is working will be
accounted for as a special debit in its balance sheet.

#Transfer of admitted debits to other stations will be taken as special debit by the station to which
debit was transferred.

# Earnings of halt station

#Terminal tax /Pilgrim tax

# Memo delivery
But, candidates are advised to concentrate firstly on tallying the balance sheet. This categorisation
can be attempted, after once we get mastery over the subject.

Vasu Kanuparthy [10:28 AM, 10/1/2018] +91 97524 75104: 6.precious mandays could be achieved as
we have to compile single account current

[11:14 AM, 10/1/2018] +91 97524 75104: There are areas where we have to streamline the existing
system, earnings also have to be done through e_ recon along with GST DEBIT transfers rather
relying on various software platforms,so that the actual account current is compiled can help
management to assess the earnings and expenditure. In fact only one directorate has to deal the
issue to avoid issue of contradictory directives. At present budget and account directorates are
issuing different instructions making the zonal railway to change the account current or issue
correction slips even after closure of accounts. If these are taken care of the advantages of single
account current become more useful and effective and efficient.

[11:15 AM, 10/1/2018] +91 97524 75104: There are areas where we have to streamline the existing
system, earnings also have to be done through e_ recon along with GST DEBIT transfers rather
relying on various software platforms,so that the actual account current is compiled can help
management to assess the earnings and expenditure. In fact only one directorate has to deal the
issue to avoid issue of contradictory directives. At present budget and account directorates are
issuing different instructions making the zonal railway to change the account current or issue
correction slips even after closure of accounts. If these are taken care of the advantages of single
account current become more useful and effective and efficient.

Shri.Padmanabham [11:59 AM, 10/1/2018] +91 77023 64501: Very good and practical suggestion.
Further, Process of On line submission of both coaching and Goods balance sheets should be
completed early. This would have the way for single account current every month.

[12:01 PM, 10/1/2018] +91 97524 75104: Online balance sheet is being made on our railway
parallely on trial basis, good suggestion to be included in the answer

[1:33 PM, 10/1/2018] +91 77023 64501: Southern railway and South Central also did on trial basis -
cog side. Goods balance sheet can be done on FOIS but Traffic Department should do work on
demurrage/wharfage like feeding wagon data, type of goods sheds etc., Co-ordination problems
have to be tackled at higher level and CRIS has to be roped in as it has data.

Frauds in Salary detected in Northern Railway

[3:30 PM, 10/1/2018] +91 94525 23421: Subsequent to frauds in Salary detected in Northern
Railway, a committee of PFA was constituted by Board to conduct Functional Audit of IPAS. Based on
the recommendations of the committee , Board has asked CRIS to make changes in IPAS.

Changes in IPAS are being carried out in phased manner. Some of the changes, which will be
released in few days are as under:-

1. OTP to be made mandatory for users.

2. PAN to be made mandatory for employees.

3. New employee entry to have a field to certify whether the employee has filled S1 form.

4. Data of New entrants to be checked at 3 level at Executive side and 2 level at Accounts side.

5. Salary to be processed with 3 levels at Executive side and passed at 3 levels at Accounts side.
System will show necessary information online to the users at each level so that any abnormality is
not ignored.

6. Employee Data editing to have 3 levels for important attributes like DOA, DOB etc.

As most of the activities require declaration of userids at 3 levels, units are requested to provide
userids at each level for each Bill unit. The same is to be done for Executive side (PL1, PL2, PL3) as
well as Accounts side (AL1, AL2, AL3). Here PL stands for Personnel/Executive side Level and AL
stands for Accounts side Level. The screen for the same is already available in IPAS under Admin
option provided to Administrators. Smaller units like CORE, Constructions where only 2 level exists,
may leave PL1/AL1 blank.

[3:30 PM, 10/1/2018] +91 94525 23421: Message as received from CRIS

Afzal

If EMD is not given the offer is invalid.

If PG is not given follow 90/60 days rule.

SD will be recovered from running bills, no question of not given by Contractor

Let me clarify that 60 days is still applicable to works contracts as GCC for works is not amended yet.
90 days applicable for service contracts

V.Sridhar

Productivity Review: - After a scheme or project has been taken up after conducting Productivity
Test, it is seen that whether the test requires any changes due to introduction of any new Technique
or Higher Technology, as a result of which better results, can be achieved to meet our ever
increasing Railway expenditure and the necessity to bring about a sensational savings. This review is
called Productivity Review.

Productivity test or review is one and the same.

In the case of works which have been sanctioned on the considerations of financial return, the
periodical productivity test/review will be conducted by the Financial Branch.

The object is to compare the earnings or savings in working expenses eventually realized.

After a work has been selected for productivity test/review, it should be noted by the Finance and
Accounts Officers for maintaining separate records of expenditure and earning relating to that work
so that the productivity test/review can be conducted as soon as it falls due.
Negotiations

There should normally be no negotiations. Negotiations shall strictly be an exception rather than a
rule and only where rates received are unjustifiably higher and also in situation of cartel formation
with unreasonable rates.

Negotiations shall be held only with the lowest acceptable tenderer (L1- the lowest,valid,eligible and
technically acceptable tenderer ) who is technically cleared/approved for supply of bulk quantity and
on whom the contract would have been placed but for the decision to negotiate. Decision to
negotiate shall be taken by tender accepting authority.

If called for negotiation, the tenderer will have to depute their authorized representative to attend
the negotiations along with proper authority letter who can take on the spot decisions as may be
required in the matter. They have to give a declaration before the negotiation that original offer
shall remain open for acceptance on its original terms and conditions.

Counter offer

In cases where the overall value of L-1 is not unreasonably high but the rates for certain item(s)
in a schedule or the total value for a scheddule happen to be higher than those quoted by other
tenderers in the same tender or higher than the last accepted rates, the method of counteroffering
the lower rate obtained in the same tender is prevalent on railways.

There are two circumstances.

i. As a substitute to/in lieu of negotiation:

The procedure of counter offering as a substitute to/in lieu of negotiation (dispensing with it
altogether) is totally prohibited.

If price negotiation becomes warranted then negotiation will be held in an objective, meaningful and
analytical manner.

ii. If the L1 tenderer refuses to accept the counter offer, the tender shall be discharged.

Rates quoted without any condition attached (viz. discounts having linkages to minimum order
quantity, prompt payment, prompt Receipt Note etc.) will only be considered for tender evaluation
purpose. However, this does not preclude Railways from making counter offer of rates of any of the
conditional offers.

Shri.Padmanabham

When L 1 backs out or does not pay PG also., Negotiations can be done with next valid lowest offer
provided they agree with the rate of valid L1. This is a directive from transformation cell.

Para 1315 onwards in Engg. Code gives all details. Transformation cell/ Railway Board also issued
circulars in this regard basically empowering Sr. Supervisors to record MB with test check by AENs.

Auction sale vs Tender sale

Railways purchase and stock stores only in such quantities as their requirements warrant and a need
for the sale of such stores should not arise under normal circumstances.

Sales are affected in one of the following ways—

(i) by public auction;

(ii) by inviting tenders for purchase or submitting tenders offering to sell; and

(iii) by direct sale.

No materials which are not overstocks or surplus to requirements or obsolete, unserviceable or

scrap should be sold by aucticn or tender.

Auction sale

Scrap, surveyed by a survey committee and the sanction of the competent authority obtained to
such sale will be sold generally by auction in railways. All scrap material accumulated for the purpose
of auction sale should be separated into convenient 'lot' and particulars of each lot are entered in
the Survey Sheets which are submitted to the Survey Committee.

Reserve prices based on the bids obtained at past auctions and any other information available are
fixed by the depot officer.

Railways enter into agreement with an auctioneering firm of repute and financial standing to handle
the sale of railway materials by auction.

Inspector of Stores Accounts or a Stock Verifier as an Accounts Representative to witness the auction
sale.

The successful purchaser has to present to the Depot Officer a Delivery Order, made out by the
auctioneers authorizing Stores Department to make such delivery. Weighment and Delivery is
witnessed by Depot store keeper, ASV and RPF. ASV will sign the sale issue note after fully satisfying
himself that entries made therein agree with those in the field book.

Tender sale

I.Sale by Invitation Tenders: In inviting tenders for the sale of stores it should be seen that—

(a) The tender notice which is published gives clear particulars of the materials to be sold,
approximate quantities thereof and the place and the probable date of sale; and

(b) tender forms containing the conditions of agreement are available to intending tenderers at
nominal prices fixed.

(c) The purchaser should pay the agreed amount less the earnest money already deposited within
fourteen days of the date of intimation of the acceptance of the tender.

(d) The purchaser should take deliveries of materials purchased within a stipulated period of time.
Delivery is ordinarily be made in the presence of an Accounts Stock Verifier who should attest the
weighment registers and other initial records.

II. Sales by Submission of Tenders: Railways may also submit tenders in response to public invitations
for tenders for supplying materials (whether such invitations are issued by railways, other
Government Departments or by private bodies). This method of sale is particularly suitable where
the railway is pressed to dispose of its 'overstocks' and 'surplus stores'.

[10:22 AM, 10/2/2018] +91 89081 59637:

The cost of additional pitching stone laid in training work n protective work after their completion

Plz sir give answer with details of its allocation 🙏🏻

[10:47 AM, 10/2/2018] +91 94910 43283: As per Para 705, F-1 the cost of additional pitching
stone laid in training works and protective works after the completion of such works shall be
booked to Ordinary Revenue

[11:05 AM, 10/2/2018] +91 94910 43283: In bridge works side slopes of guide bund needs
protection on following counts:- i) Wave action on the upstream side ii) Water current along
the slopes iii) Wind action iv) Rain cuts/Rain water.

Most common method is to provide stone pitching.

For girder bridges allocation: 04-310 & other bridges : 04-320

[5:36 PM, 10/2/2018] +91 98713 29585: Expenses on training of Driver before appointment falls
under which demand sir?

[5:38 PM, 10/2/2018] Nageswara Rao SSO CTARA: Before appointment or after appointment,
training center expenses charged to demand no 12 -miscellaneous working expenses

[5:39 PM, 10/2/2018] +91 98713 29585: After appointment the same isn’t charged to respective
demands ?

[5:39 PM, 10/2/2018] +91 98713 29585: For example: Gaurd to demand no 9

[6:00 PM, 10/2/2018] +91 77023 64501: However, expenses relating to training in CTIs like IRISET,
Ctara are allocated to Demand No. 2.

[6:07 PM, 10/2/2018] Nageswara Rao SSO CTARA: Yes sir

[6:32 PM, 10/2/2018] +91 94910 43283: Yes.

Erstwhile D#12 MH 500 will take expenditure incurred for running of training institutes and also pay
and allowances of trainees during their training period.

After going back to the working posts, the pay and allowances of such staff are booked to respective
demands. F-II indicates the same.

Cost of training of staff in other than CTIs, is booked to erastwhile demand#12, MH#500
511- This will include pay and cost of instructors, messing charges, upkeep etc, of Railway Training
School. Similar charges for Medical/ Health and Welfare Department will be booked to head K. 531.

SH# 512 will cover stipend, pay and allowances of trainees and Trade Apprentices of all
Departments except Medical including Health and Welfare. Similar charges for Medical/ Health and
Welfare Department will be booked to head K. 532. Pay and stipend to non-gazetted staff during
refresher courses whether in Railway Training Centres or outside will also be booked to this head.

Charges paid to other institutions for training of non-gazetted Railway staff and cost of training
abroad of non-gazetted Railway personnel is also booked to SH 515&516 respectively.

The expenditure incurred on the training of special class apprentices in Indi. the expendSH#517.
Expenditure upon completion of the special class apprentice-ship, will be charged to the respective
demands of the Railway to which the officers are posted.

[4:07 PM, 10/3/2018] +91 77023 64501: Daily Materials Transaction Register(DMTR), Department of
Audio- Visual Publications ( DAVP), Preliminary Works Program, List of Approved Works, Standing
Earnest Money Deposit, Cash Order 07 we call C07 this is in para 1107-A., SSR means Standard
Schedule of Rates. Is it clear?

[4:07 PM, 10/3/2018] +91 79875 66067: What is Zero-Based Budgeting?

Zero-Based Budgeting (ZBB) is a method of budgeting in which all expenses will be justified for each
new year. ZBB starts from a “zero base” and every function of the government is analysed for its
needs and costs. It involves preparing budgets which every year must start from scratch with no pre-
authorised funds. It requires each activity to be justified on the basis of cost-benefit analysis,
assumes that no present commitment exists, and that there is no balance to be carried forward. It
also provides a systematic basis for resource allocation.

In other words, ZBB is an approach to budget formation where in a government prepares a budget
from the ground, starting from zero rather than making an incremental provisioning for projects
over previous year. This is part of an exercise to do away with unnecessary schemes.

How it is different from traditional budgeting?

As opposed to traditional budgeting, no item is automatically included in the next budget. Every
program and expenditure is reviewed at the beginning of each budget cycle and must justify each
line item in order to receive funding.

ZBB was discarded by policy practitioners owing to the method being an impractical budget-making
option. However, with the global financial crisis of 2008, it has come back in the reckoning for its
focus on prudent spending during budget formation.

Where has it been used?

ZBB first rose to prominence in government in the 1970s when US President Jimmy Carter promised
to balance the federal budget in his first term and reform the federal budgeting system using ZBB, a
system he had used while he was the governor of Georgia. ZBB, as Carter and bud get theorists
envisioned, re quires expenditure proposals to compete for funding on an equal basis -starting from
zero.

However, the concept did not take off in a big way.

Why is zero-based budgeting back in the reckoning now?

The global economy and many other advanced countries have been experiencing the worst
economic slowdown in decades. These times have imposed major fiscal challenges on local
governments which have prompted serious changes on how resources should be allocated. In
today's environment of fiscal constraint the "zero" in zero-base budgeting sends a powerful message
that taxes and spending will be held in check. Since 2008, many firms and government agencies have
started using this form of budgeting.

How relevant is the option in the context of India?

In India, the state of Maharashtra attempted ZBB in the eighties under the then finance minister
Late Shrikant Jichkar. More recently, railways minister Suresh Prabhu also discussed ZBB in allocation
of resources for certain projects for Indian Railways.

What are the limitations of this process?

It is very costly, complex and time consuming as budget is rebuilt from scratch annually, whereas
simpler and faster traditional budgeting requires justification only for incremental changes. Besides,
it requires specialised training or personnel to accomplish, and requires more resources in general.

What is Zero-Based Budgeting?

Zero-Based Budgeting (ZBB) is a method of budgeting in which all expenses will be justified for each
new year. ZBB starts from a “zero base” and every function of the government is analysed for its
needs and costs. It involves preparing budgets which every year must start from scratch with no pre-
authorised funds. It requires each activity to be justified on the basis of cost-benefit analysis,
assumes that no present commitment exists, and that there is no balance to be carried forward. It
also provides a systematic basis for resource allocation.

In other words, ZBB is an approach to budget formation where in a government prepares a budget
from the ground, starting from zero rather than making an incremental provisioning for projects
over previous year. This is part of an exercise to do away with unnecessary schemes.

How it is different from traditional budgeting?

As opposed to traditional budgeting, no item is automatically included in the next budget. Every
program and expenditure is reviewed at the beginning of each budget cycle and must justify each
line item in order to receive funding.

ZBB was discarded by policy practitioners owing to the method being an impractical budget-making
option. However, with the global financial crisis of 2008, it has come back in the reckoning for its
focus on prudent spending during budget formation.
Where has it been used?

ZBB first rose to prominence in government in the 1970s when US President Jimmy Carter promised
to balance the federal budget in his first term and reform the federal budgeting system using ZBB, a
system he had used while he was the governor of Georgia. ZBB, as Carter and bud get theorists
envisioned, re quires expenditure proposals to compete for funding on an equal basis -starting from
zero.

However, the concept did not take off in a big way.

Why is zero-based budgeting back in the reckoning now?

The global economy and many other advanced countries have been experiencing the worst
economic slowdown in decades. These times have imposed major fiscal challenges on local
governments which have prompted serious changes on how resources should be allocated. In
today's environment of fiscal constraint the "zero" in zero-base budgeting sends a powerful message
that taxes and spending will be held in check. Since 2008, many firms and government agencies have
started using this form of budgeting.

How relevant is the option in the context of India?

In India, the state of Maharashtra attempted ZBB in the eighties under the then finance minister
Late Shrikant Jichkar. More recently, railways minister Suresh Prabhu also discussed ZBB in allocation
of resources for certain projects for Indian Railways.

What are the limitations of this process?

It is very costly, complex and time consuming as budget is rebuilt from scratch annually, whereas
simpler and faster traditional budgeting requires justification only for incremental changes. Besides,
it requires specialised training or personnel to accomplish, and requires more resources in general.

[7:30 PM, 10/4/2018] +91 77023 64501: Internal Check is checks exercised by Accounts Department
in Railways both earnings side and expenditure side. This is so called to distinguish from the checks
done by Audit Department. Internal check is the process of checks done by the Accounts while
passing bills, accountancy of earnings and booking of adjustments. Various rules envisaged in
Accounts Code Vol I and II and various instructions prescribed by Rly. Board from time to time and
also by PFA are the basis for conducting internal check.

[7:33 PM, 10/4/2018] +91 98713 29585: Sir what is accounting reforms?

[7:34 PM, 10/4/2018] +91 77023 64501: Internal Audit is broader way of conducting checks beyond
just internal check. This includes investigation of frauds and irregularities and special investigations.
It also goes into all operations of financial transactions of organization.

[7:40 PM, 10/4/2018] +91 77023 64501: Statutory Audit is the audit carried out by PDA as per the
directions of CA& G. Statutory Audit is carried out to ensure the system of payments and receipts
are done as per standards of financial propriety. No overpayments are made. Accounts of earnings is
done properly. It would also detect any frauds and irregularities and report. It's report is submitted
along with audited accounts to Parliament through PAC as feed back on parliamentary financial
control.

basic difference between store contract and work contract...If contractor uses railway store
material...It may be treated as work contract or store contract

[10:42 PM, 10/4/2018] +91 94910 43283: All works and supplies relating to the Engineering
Department executed through the agency of contractors may be broadly classified as as `Work
Contracts' as distinguished from `Stores Contracts' which pertain to the supply of stores arranged by
the Stores Department.

[10:50 PM, 10/4/2018] +91 94910 43283: Where value of supply of material is predominant, and
such supply arranged by stores department, it may be considered as stores contract

[2:46 PM, 10/6/2018] +91 94910 43283: Special Limited Tender

Special Limited Tenders may be adopted in the following situations in consultation with PFA:

Works of specialised nature

Works of Urgent nature

Special limited tenders may be invited from specialised and reputed contractors/ organisations/
agencies.

A proposal detailing the circumstances and the necessity for going in for Special Limited Tenders
should be, initiated and got concurred by FA&CAO in respect of Open Line and FA&CAO(C) in respect
of Construction Organization before approval of the competent authority is obtained.

Tenderers from whom Special limited tenders are to be invited should preferably be more than six
but not less than four.

Tenderers need not necessarily be borne on the Approved list.

As per model SoP, the powers of calling of SLT are as under:

a) Works of specialized nature

1 PHOD/CAO/C Full Powers.

2 DRM/ADRM/SAG Full powers upto Rs. 10 lakhs

a. Associate Finance concurrence is necessary.

b) Works of urgent nature

1 CAO/C Full Powers

2 DRM/ADRM/SAG Full powers upto Rs. 10 lakhs

a. FA&CAO/C concurrence is necessary for all construction works.

[2:55 PM, 10/6/2018] +91 94910 43283: Price Fall Clause

The fall clause shall be applicable only to Rate Contracts and shall not be applicable to fixed quantity
Contracts including Running contracts.

However, for the purpose of making it applicable to Rate Contracts, the same may be included in the
special conditions of the Contract. In such situations, the concerned officers should apply their mind
adequately, while deciding to stipulate Fall Clause in Fixed Quantity Purchase Orders/Running
Contracts.

The Contractor shall furnish a certificate to the concerned Accounts Officer along with each bill for
payment of supplies made against the contract stating that there has been no reduction in sale price
of the stores of description identical to the stores supplied up to the date of bill, at a price lower
than the price charged to the Government under the contract.

Fall clause

The price charged for the stores supplied under the Contract by the contractor shall in no event
exceed the lowest price at which the contractor sells the stores or offer to sell stores of identical
description to any persons/organizations including the purchaser or any Department of Central
Government or any Railway Office or any Railway undertaking, during currency of the contract.

The lower price will be applicable to supplies made after the date of coming into force of such
reduction or sale or offer to sell at a reduced rate.

Damu - I feel it is not valid now.

In model SoP under SLT, only two categories were mentioned; and consultancy service is not there.

Afzal

SLT is a type of tender like open, limited, single etc...and can be applied for any work,. Services and
consultancy. Consultancy is also a type of service.

Damu - That would mean SLT can be adopted for consultancy services also, with associate finance
concurrence.

Thanks for update, Afzal.

Only criteria in SLT is the renderers shall not be less than 4 and preferably the 6.

These agencies have to be pre selected based on their proven credentials before the bids are invited.
There is no question of again a criteria in the tender.

Some depts call SLT with Eligibility criteria, which is not correct

Rohit - More technically sound contractors are selected in SLT??????

Afzal - SLT is like calling of only financial bid from already qualified bidders

Afzal - Yes sir.... consultancy caa be given even on single tender/single quotation basis also
Rohit [10:10 AM, 10/7/2018] +91 98713 29585: Sir consultancy means bridge work? Aur any other
works?

Afzal - [10:11 AM, 10/7/2018] +91 94906 90320: Any specialised or highly technical work or services

Rao - the activity of giving advice on a particular subject:

Afzal sir expecting the following questions

1. List out at least 10 major delegation of powers GM/DRMs in the process of. Reforms and
decentralisation of powers

2. Distinguish between Works and Services contracts

3 GCC for services and GCC for works

4. What are major changes made in the recent past in tender and contract management

5. Umbrella works

6. What are various types of tenders, advantages and limitations

7.What is work register.. how does it help in control over capital exp

8. MSOP and it's salient features

9. CMB Vs MB

10. Reverse Auction in works tender

11. Letter of Credit

12. GEM

13. What are the checks required on the Contractors/ Suppliers bills especially with reference to
GST, CMB, LC

14. What are your various types of works estimates....checks excercised on each one of of them
during internal check

15. What is excess over estimate.... how can we minimise it

16. What is cost overrun due to time over run..reasons...how can we minimise it or avoid it

17. Why do variation occur in a contract...how can we minimise it... what are the checks that were
are required during internal check of variation

18. What is objectionable items register... what are the types of objections taken by Accounts and
how are they regularised.

19. What is IRPSM.... it's advantages and limitations. How can it be made more effective in
monitoring projects
20. Lumsum works- OOT works

21. Price Variation for works/ services. How do you compensate increased labour wages during
pendency of contracts

22. Rules regarding PBG and SD

23. There is increased trend in the Arbitration these days. Discuss the causes and remedies

24. What are the powers of direct acceptance of tenders... what is the role of Accepting Authority....
what are the reasons where direct acceptance is not permitted.

25. What are various sources for funding Railway Projects.. explain each one of them.... how the
funds are debited/given and credited/spent

26. What are the rules for Re Appropriation of funds (both Rev and Demand no 16)

24. Write short notes on..

Productivity test

Permissible cost

IREPS

IPAS

Urgency certificate

Completion Report

PETS

Eligibility criteria

Dissent note

Dispensation of vetting of Indents/Pos

Deposit works

Liquidated damages

BOOT

Material modification

Negative Powers of GM

Trial and Experimental works

[2:27 PM, 10/7/2018] +91 94906 90320: Eligibility criteria is the minimum experience and turnover
requirements which needs to be fulfilled by the tenderer for the eligibility to participate in the
tender.

For works tenders valuing more than 50 lakhs, the criteria is minimum successfull completion of one
similar work of 35% of the tender as works experience and 150% turnover... during last 3yrs.

For tenders upto Rs 50lakhs no eligibility criteria for works tenders

[2:27 PM, 10/7/2018] +91 94906 90320: Dissent note is referred to a situation in recommendation
of tender where one or more numbers of TC members don't agree with the recommendation of
other member/members. In such case a separate note is given detailing as to why they are not in
agreement with other members

Temporary Post, means a post carrying a definite rate of pay sanctioned for a limited time.

Tenure Post, means a permanent post which a servant may not hold for more than limited period.

Revenue post, means a post created by giving matching money value of the post from vacancy bank
and chargeable to revenue.

Workcharged post means a post chargeable to D&G charges of a sanctioned work worth of charge.

Time-Scale pay means pay which rises by periodical increments from a minimum to a maximum.
Time-scales are said to be identical if the minimum, the maximum, the period of increment and the
rate of increment of the time-scales are identical.

Negative Powers of GM

The main source for delegation of powers to GMs is the annexure II of chapter V of Finance code
volume I .

The delegation begins with a sentence as ..The previous sanction of higher authority is essential...

This means the items listed out in the annexure requires the sanction of RB. Other than the items
listed and partial delegation available to GM, sanction of RB is required. In simple words GM can
sanction anything other than the list of powers in the annexure

Doorstep banking

Under scheme, the bank’s agents will collect the earnings of the day from each of the stations and
credit it to the Railway account online in 24 hours. Bank agents would collect cash, cheques and
vouchers at the station itself and give acknowledgement on the spot.

This move abandones hoary practice of depositing the day’s collection in a leather bag, sealing it and
dumping it in a giant cash chest, and carrying it to the guard’s compartment of the designated cash
train, transporting it to the cash office where an official with a master key would open it in the
presence of traffic witness officials.

Major stations with banking facilities have switched to depositing the amount at the nearest branch.
Cash depositing practice is in vogue in remote stations where there are no banking facilities. But
here, the challan for cash deposit in banks from all stations continues to be transported through
cash chest.

Doorstep banking

And also savings by railways are ensured, as it avoids any means of transport to remit the cash at
bank safely. STATION EARNINGS were being taken to bank by the CBSR , along with an RPF. So Man
hours are also saved.

Honorarium and safety of cash and reduction in manpower are other advantages

[5:27 PM, 10/8/2018] +91 94910 43283: IRCA debits-Wagon Hire Charges

Based on these Daily Junction Reports, IRCA staff work out the total number of wagons made over to
and/or taken over from other adjoining railways by each railway each day.

They also workout wagon balance for each railway each day. Wagon balance is the net difference
between the ownership and the actual holding of wagons of a Zonal Railway, on a particular day.

If a particular railway holds less number of wagons than it owns on a particular day, it is entitles to
hire charges for balance of the wagons.

Conversely the railway holding more wagons than its own is liable to pay hire charges for the excess
number of wagons it holds.

Hire charges bills both in respect of BG and MG wagons are issued by IRCA.

Incidence of expenditure on Wagon Hire charges

The per day wagons hire charges are made up of the elements of repairs and Maintenance,
and depreciation charges. The debits or credits should be shown separately under the
relevant heads and grants i.e., the element pertaining to repairs and maintenance, and
depreciation charges should be shown under the appropriate head of account and grant
(Abstract G- 741, 742)

[5:55 PM, 10/8/2018] +91 94910 43283: Incidence of expenditure on Loco performance and Fuel
(Diesel) Consumption

A. When the diesel locos of one Railway are serviced in the loco shed of a contiguous railway system,
the debits for performance are adjusted on GTKM basis through inter-railway financial adjustment .

B. For adjustments on account of fuel consumption (diesel oil) credit or debit should be
afforded for the work done by the Railway on behalf of the other Railway systems under
SMH#8 (erstwhile Demand#10). Adjustments should be made on the basis of rate of
consumption per 1000 G.T. Kms. This rate should be as realistic as possible taking the specific
trip/shed/divisional rate of consumption.

[6:00 PM, 10/8/2018] +91 94910 43283: Incidence of expenditure on Hire of passenger coaches
The credit/debit adjustments should be worked out on the basis of kilometres earned by
through rakes/passenger coaches running on more than one railway system. Vehicle
kilometres in respect of through coaches should be worked out on the basis of the working
time table periods and the rake links.

As in the case of wagon hire, hire of Passenger coaches should have three distinct
constituent elements, viz., Repairs, maintenance and Depreciation charges. Unit cost should be
worked out by the Zonal Railways separately for each of these constituent elements per
vehicle kilometre and the individual rates should be applied.

[6:00 PM, 10/8/2018] +91 94910 43283: Engine hire charges

The engine hire charges are revised from time to time by Railway Board separately for Diesel
locomotive: Shunting and Train engine; Electric locomotive: Train engine. These shall be used for
arising debits against other zonal Railways and for raising bills against sidings..

Red Tariff

For conveyance by Rail of Explosives and other Dangerous Goods notified by the Central
Government, this tariff is published by Indian Railway Conference Association.

No person shall take with him on a railway, or request a railway administration to carry such
dangerous or offensive goods, as may be prescribed, except in accordance with the provisions
contained in the Railway Act.

Red Tariff will apply to the carriage by rail including carriage in containers of the dangerous
goods specified in the rules (but not to the carriage of explosives and certain other
dangerous goods for the Defence Services of the Government of India, in respect of which
separate rules have been provided in the Military Tariff).

Dangerous goods having regard to the Hazard involved in their carriage by rail, are classified
into the following eight classes– (i) Explosives (ii) Gases, compressed, liquefied or dissolved
under pressure; (iii) Petroleum and other flammable liquids; (iv) Flammable solids; (v) Oxidizing
substances; (vi) Poisonous (Toxic) substances; (vii) Radio-active substances; and; (viii) Acids and
other corrosives.

Others

Railway Rates Tribunal: - in the year 1929 a rates advisory committee was set up for the purpose of
examining the complaints of Undue Preference’ of rates laid down by Govt. this committee consisted
of Chairman who was a lawyer and two members and one represented the trade union and other
from Railway Administration. This committee functioned purely as an advisory body was
subsequently replaced by RRT for which India Rly. Act as to be amended in 1949 RRT was constituted
under section 34 of Indian Railways Act, which provided the tribunal. The tribunal is authorized to
examine all complaints made to it either by the trade or by the Govt. in respect of the provisions laid
in sections 70, 36, 37 and 39 of Indian Railways Act 1980 under section 36 under which complaints
can be made against a Railway Administration as under
any complaint that the Railway Administration

is contravening the provisions of Sec 70

is charging for the carriage of commodity between two station is unreasonable

---Or---

c. is levying any other charge which is unreasonable my be made for tribunal and it shall hear and
decide any such complaints in accordance with the provision of the tribunal

Pension Fund

Utility of the Fund: to meet the pension liabilities of retiring/retired railway employees and
family pension.

In the year 1957, a defined benefit but non-contributory pension plan was designed for the
employees of the Indian Railways (IR). Then IR decided to set up a pension fund, IRPF, in the year
1964, where regular contributions was decided to be made annually in order to build up a significant
amount of corpus to meet the future liabilities. Simultaneously, IRPF was also required to pay
monthly pensions to the retirees, retired on or before its establishment at that time.

With the setting up of IRPF, the Controller of Insurance worked out that an amount of about Rs.30
crore was required to be credited to the pension fund every year. This amount was estimated to
meet the pension costs including family pensions for a stationary population of 10 lakh employees,
who were expected to avail the pension benefits. But the IR actually credited a far less amount
ranging between Rs.12 to 16 crore every year during the period 1964-65 to 1974. Pay-as-you-go
method of appropriation to the fund is being continued even today.

This is operated as a minor head under the major head 821 General and other Reserve Funds
(under J-Reserve Funds (a) Reserve Funds bearing interest).

Receipts into the Fund will consist of appropriation from revenue/capital account and interest on
Fund balances.

All payments relating to pension and other retirement benefits to pensionable employees will be
debited to the accounts of the Fund. The balance of the Fund will be carried forward from year to
year.

A glance of the fund balances

Estimated opening Balance ₹1057.30cr

Transfer to the Fund ₹44000cr

Utilisation from the Fund ₹45000cr

Estimated closing Balance as on 31.3.2018 ₹57.30cr

Rao: Pension fund

Pay as you go method completely against the basic actuarial methods. Audit also objected several
times. But Railways had no option due to scanty internal resources.

Shri.Padmanabham

Accounting reforms mainly comprise of Accrual Accounting, Performance Costing and Outcome
Budget. While pilot projects relating to accrual accounting is being carried out all over IR in
association with ICAI, performance costing and outcome budget has been entrusted to Institute of
Cost Accountants of India. Interim report on pilot study of costing in Northern Railway is in public
domain. Idea behind all these developments is to ensure transparency, better accountability, reliable
data for decision making.

Fixation of Railway Rates-An understanding

The railway freights are fixed on the principle of "What that traffic wilt bear".

By the phrase "what the traffic will bear" is meant the fixation of railway rates according to the
freight bearing capacity of each service performed by the railway.

Railways, for instance, carry different classes of passengers and different kinds of goods. The paying
capacity of each passenger is different. A rich passenger can afford to pay higher fare compared to
the poor. Similar is the case with the commodities.

Some commodities are highly valued and others are low priced. A highly priced commodity can
stand a higher charge than a low priced commodity.

Railways carry gold as well as coal. The gold is highly valued and the coal is very low priced. If a
uniform rate carrying all kind of goods and for ail classes of passengers is fixed, it may not be
possible to cover the total cost. Therefore, railway acts on the principle of what the traffic can bear.
It charges different rates according to the freight-bearing capacity of each service of good and thus
maximizes its revenues.

Freight rate revision- An understanding

There are two ways of changing the freight rate of any commodity.

In case freight rate of a particular commodity is to be increased, then the same can be
done....

(1) Increasing the freight rate for that class, in which case freight rate of all commodities in
that class will be uniformly increased

(2) The classification of that particular commodity can be increased. Here the change does not
effect any other commodity.

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STATION MASTER NEWS - www.stationmasternews.blogspot.com

RAILWAY & RBE ORDERS - www.rlyrbe.blogspot.com

RAILWAY MANUAL & CODES - www.railmanual.blogspot.com

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INDIAN RAILWAY QUESTION BANK www.indianrailwayquestionbank.blogspot.com

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Check of invoices

In the check of Invoices/ Railway Receipts (RRs), it should be seen that:

Stationery

(1) System generated RR is prepared in pre-printed stationery & Continuity of stationery numbers
and RR numbers is maintained.

Classification,Routing,Weight

(2) the classification is correct according to the description of goods given in the invoice; (3)
articles which are required under Tariff Rules to be booked "Paid" are not booked "To-Pay"; (4) in
the case of Through traffic, the instructions regarding the routing of traffic and calculation of
charged-recoverable have been correctly observed (5) both the actual and chargeable weights are
correct

Rates

(6) the rate on which the freight has been calculated agrees with the rate given in the Rate Lists or
Rate Tables (7) in cases, where reduced rates are charged, there is evidence that the Tariff
conditions attaching to the lower rates have been duly fulfilled and where there are alternative
('Railway' or 'Owner's Risk') rates and the Railway Risk rate is charged,. the invoice bears the
following endorsements "Railway Risk rate elected and Sender given a Certificate". (8) the rules in
force regarding minimum charges are observed; (9) if freight is paid by credit note, at the
forwarding station, the number and date of the credit note is entered on the invoice

Loading

(10) where the loading and unloading is required to be done by the consignor or consignee
respectively, symbol "L" is written in the column "Handled By" on the invoice

Concession

(11) when consignments are carried at special reduced rates on the authority of certificates, the
connected invoices bear a remark that necessary certificates have been granted by authorized
officers, and submitted by the stations to the Accounts Office. In the case of consignments booked
under several invoices at concession rates on the authority of one certificate, the certificate is
furnished with the first invoice so issued, all subsequent invoices bearing reference to this authority;
(12) in cases where concession rates are charged on empties returned to the original booking
station, the particulars of original booking are given on the invoices and they are correct.

U/c & O/c

(13) If FAUC (Freight adjustment of under Charges)/FAOC (Freight adjustment of Over Charges) have
been operated, the same has been correctly calculated.

Other charges & Taxes

(14) If any “Additional / Other Charges”(Busy Season Surcharge, Development Surcharge, Terminal
access charge, Port Congestion Surcharge, Siding Charge, Penal Overloading Charge etc) have been
levied, they have been correctly calculated. (15) Tax component GST, Cess, Surcharge etc) have
been correctly levied.

Confirmation

Confirmation regarding checking of a particular invoice, should be made in system maintained by

CRIS, only after all the above aspects have been ensured.

( From A-II)

Actual chargeable distance

The actual engineering distances upto two decimal places of the various sections from originating
station to destination station will be added up and the distance so aggregated would be finally
rounded off to the next higher kilometer for deriving the chargeable distance.

It is ensured that for deriving the “chargeable distance”, the summation of individual sectional
distances be ‘rounded off’ only once at the end.
This rationalization is aimed at ensuring uniformity in the method of deriving the distance of
charging fares and freight for all customers across the Indian Railways.

Inflated chargeable distance

However, the fares for some routes, however, are different than the fare expected based on looking
up the fares for the actual route-km in a fare table.

These are lines with very sparse traffic, tourist lines or lines with other special conditions, like hilly
terrain etc. In such cases, there is a chargeable distance associated with the route, which is the
distance to be used when looking up fares in a fare table, regardless of the actual route length. This
is inflated distance for charging purpose.

For instance, the Neral-Matheran NG route is only about 21km long (Travel Time: 2h 10m; 3 halts;
Avg Speed: 9 km/hr), however the ticket fare for the journey is based on a chargeable distance of
126km (and in fact, the distance markers along the way show the inflated distances, not the physical
distance).

Other routes for which (chargeable) inflated distances differ from the actual distance are Kalka-
Shimla, Pathankot - Joginder Nagar etc.

Konkan Railway also charges fares based on a inflated (chargeable) distance being 40% higher than
the actual distance, a measure intended to recover some of the construction costs for the lines.

Liquidated damages

This is one of the remedies provided in the agreement,in case of breach.

Recover from the Contractor as agreed Liquidated Damages and not by way of penalty, a sum
equivalent to 2 % (Two per cent ) of the price of any stores (including elements of taxes, duties,
freight, etc) which the Contractor has failed to deliver within the period fixed/extended for delivery
in the contract , subject to a maximum of ten percent (upper limit) of value of the delayed supplies.

System of wavier of Liquidated Damages and imposition of Token Liquidated Damages (Token LD is
10 % of the above 2%) for delayed supplies in supply contracts will strictly be an exception rather
than rule.

The authority who has approved the tender is given full powers to impose or waive these penalties
in respect of contracts entered into under his own powers.

Liquidated damages accrue only in case of delayed supplies.

In the case of supply orders placed against the rate contracts, educational or development
contracts normally the delivery date stipulated in the supply order is not binding on the
supplier and there fore, no liquidated damages shall be levied for non-supply or delay in
supply against such orders.

General Damages: Where liquidated damages cannot be levied in a contract according to

legal opinion, general damages can be levied.
Letter of Credit-LC

A letter of credit, also known as a documentary credit, bankers commercial credit, is a payment
mechanism used in international trade to perform the same economic function as a guarantee, by
allocating risk undertaken by contracting parties.

Letter of credit is an instrument to cover risk for both parties- the buyer and overseas seller.

It is a commitment by Bank.

To place an agreed amount of money at Seller’s disposal, On behalf of the Buyer, Under precisely
defined conditions.

On Railways, it is resorted to in the case of imports. Accounts office will be opening letter of credit in
the bank for this purpose.

Parties to LC

Buyer/Importer - Applicant (railways)

Seller/Exporter - Beneficiary

Buyer’s Bank - Issuing Bank

Bank in Seller’s Country

Issuance and utilisation of LC

Issuance

A purchase order will be issued for the imported stores. On receipt of information of Shipping, the
executive will advise the accounts office for initiating the process of letter of credit for arranging
payment.

Railways will apply to the bank for opening of letter of credit.( It is made by nominated Accounts
Officer of the Railway. He makes the application and the guarantee for LC to the issuing Bank.
Addressed to RBI and copied to SBI (the LC opening Bank) and the Importer (PCMM). It is a contract
between the Bank and Importer. The application stipulates conditions for discharge of L/C and
release of payment.)

Our Bank will mail the letter of credit to the bank in seller's country.

Bank in Seles country then notify the receipt of letter of credit to the foreign supplier/seller.

Utilisation

Upon LC being notified by his bank, the seller will dispatch the material to the buyer.

Shipping documents will be furnished to his bank and on the strength of letter of credit payment will
be released to the seller.
Shipping documents will then be transmitted to the local bank and the payment will be reimbursed
to the foreign bank.

Local bank will send the documents to Railways and our account will be debited.

Why LC?

If seller sends goods without payment: There is a risk of non-payment or late payment.

If buyer sends payment without receiving goods. There is a risk of non-supply or late supply.

There is a clear need for protection of interests of both the parties i.e. the buyer and the seller.
Solution is available in the form of Letter of Credit.

LC From traffic point of view....

Paid e-RRs Letter of Credit/Bank Guarantee

LC/ BG in e-payment system is designed to be a security to enable Railways to issue Paid E-

RRs even in cases in which no positive electronic confirmation is received by Railway about
the freight charges having been transferred from the customer’s Bank account to Railway’s
bank account.

Customers intending to opt for e-payment facility will be required to open an irrevocable
Letter of Credit (LC) in favour of the Railway at a branch of a bank mutually agreed upon by
the customer and Zonal Railway for an amount equivalent to 5 (five) days of average freight
paid by the customer to the Railway during the Busy Season in the last financial year, or a
higher amount if so agreed mutually between the customer and the Railway.

The LC should be valid for 12 months from the date of commissioning of the e-payment
facility with a provision permitting its encashment up to 15 days after the validity period of
LC, if required. Customers will need to provide a fresh LC or arrange to extend the validity of
the existing LC before the expiry of the 12 month period. Zonal Railways need to be vigilant
about the expiry dates of LC and their validity so that E-Payment system does not come
to a stop. Normally LC should be the preferred mode of security. However , in lieu of the LC
customers may also furnish a Bank Guarantee (BG) on similar terms as set forth for LC.
Decision to allow Bank Guarantee in place of LC will be taken by PFA and PCCM of the
concerned Zonal Railway ensuring that Railway’s financial interests are secured.

(Now, we knew that LC is operated in case of Imports. We also knew that the introduction of the
Letter of Credit (LoC) payment method for supply/work contracts will significantly increase
transparency and improve the ease of doing business. LoC mode of payment will apply to every
tender which will have an estimated value of or above Rs 10 lakhs.)

Please note....

#If LC question comes in Traffic Accounts, the candidates may write the present post.

#If the question comes in Stores Accounts, then earlier post is relevant.
#If the question comes in expenditure, then candidates may write about LC in works contracts.

SFTO

A few years back IR launched a Special Freight Train Operator (SFTO) scheme and recently modified
to facilitate private players to invest in and/or take on lease of wagons and earn profits through
transportation of commodities. Through this scheme, operator would privately own the freight train
for transportation of identified commodities.

The objective of this scheme is to increase the share of railways in transportation of non
conventional traffic in high capacity and special purpose wagons, thereby increasing commodity
base of rail traffic.

This will facilitate induction of better design of wagons to increase throughput per train. This policy
provides an opportunity to logistics service providers or manufacturers to invest in wagons and tie
up with end users and market in train services owned by them for rail transportation of selected
commodity.

Special Freight Train Operator will operate between private terminals equipped to handle SPW
(Special Purpose Wagons) for which SFTO must have a tie-up with such private terminals or own its
private terminals/sidings for handling of such trains.

Commodities

The commodities which would be transported through SFTO have been divided into four categories.
In the first category, there are bulk fertilisers, bulk cement and fly ash.

In the second category, there are bulk chemicals and petrochemicals (excluding petroleum products)
and bulk alumina.

In the third category are the steel products requiring specially designed wagons; and

in the fourth category there are molasses, edible oil and caustic soda.

Salient features

The SFTO scheme has diverse facets.

1 Trains purchased under SFT scheme will not be merged in the wagon pool of Indian Railways.

2 Rakes comprising of such wagons will be identified as exclusively belonging to the SFTO who has
procured them.

3 Since the rebate will be applicable on the specific rakes for a specific period, each rake will have
separate identification with date of commercial commissioning.

4 The company should have an annual net worth of Rs50 cr or annual turnover of Rs75 cr as on 31
March of last financial year.
Marketing & Operation

The SFTO will have a tie up with the end-users for marketing and arranging traffic. As far as the
Indian Railway's liability is concerned, the SFTO will be the Consignor and Consignee for the
consignment for which Railway receipts will be issued by railway commercial staff posted at the
terminal.

The SFTO will develop its own terminal or tie up with private sidings/terminals as per extant rule for
loading/unloading of traffic moved in SFT.

Role of Railways

The rakes may be used by IR for traffic offered by customers other than the SFTO subject to a prior
mutual written agreement between IR and such SFTO.

To ensure a level plying field, IR shall move the trains of SFTO on the basis of "first come first served
principle" without giving any undue preference to any particular operators.

Freight Operation Information System (FOIS) of Indian Railways shall also cater to the requirements
of the operator for an integrated management and operations information service and shall be given
`read only' access to this system on payment of reasonable cost.

Pricing

The operator would charge his customers for rail haulage, terminal handling, ground rent on a
market determined basis and railways shall not exercise any control over such pricing.

There would be no demurrage charges by the Railways, but the Railways shall levy stapling
charges/ground rent as per the rates notified from time to time in case rolling stock belonging to
the operator is stabled on account of the SFTO on Indian Railways network.

LC in Supply/Works/Service contracts

Indian Railways have decided that from 1.4. 2018 all tenders invited.. both for supplies/ works,
including all service and maintenance contracts having estimated value of ₹ 10 lacs and above shall
include a tender condition and option for the supplier/ contractor to take payment from Railways
through a letter of credit (LC) arrangement.

At the time of bidding itself the bidder shall exercise an option in favour of taking payment due
against the tender through LC arrangement. The incidental costs towards issue and operation of LC
shall be borne by the supplier /contractor.

The schedule of payment liability arising in the contract shall be established by railways based on the
delivery schedule stages of supply work in consultation with the supplier contractor SBI should also
be involved in the process to asses the value of LC and terms and conditions of LC.

Document of Authorisation

Railways will issue document of authorisation (DA) on the claims preferred by the supplier/
contractor for completed work/ supply, to enable them to claim the authorised amount from their
banker. The DA will be issued against each bill submitted for payment by supplier/ contractor after
exercising laid down checks as per Railway codes and manuals in executive and accounts offices .
Accounts Officer responsible for passing claim will issue the DA. issue of they will be captured in IPAS
and IREPS to ensure that there is no duplicate payment against the said bill.

Release of Payment

The supplier /contractor will present day DA to his banker for necessary payment. After release of
payment to the supplier/contractor, the banker will send this document to the Railways' banker (SBI)
for release of payment to them. The Railways banker (SBI) will reimburse the supplier/contractor
bank, against the original document of authorisation issued by railway and the bill of exchange
issued by the supplier/ contractor, after verifying the signatures.

Accountal

i. The LC charges paid by the Railways for opening and operation of the LC shall be charged to the
relevant expenditure head:

Miscellaneous advances debit

Miscellaneous advance GST debit

Cheques and bills credit

ii. Upon issue of document of authorisation the accounting entries are as under :

Revenue expenditure head debit

Miscellaneous advance credit

(Clearance of earlier debit)

Sundry other earnings credit

(Amount recovered over and above LC charges paid to the bank)

Demands payable /MAC credit

(As per the authorisations)

iii. Upon receipt of debit Scrolls, the accounts office will conduct necessary checks and debit DP/MAC
by credit to the suspense head PSB suspense.

PSB suspense will be cleared by the Accounts Office upon receipt of clearance memo from CAS
Nagpur.

Advantages

#improves transparency and the ease of doing business.

#end-to-end paperless working in contract management by eliminating human intervention. One
does not have to come to the Railways office for submission of bills and getting inspection
certificates

#The system includes digitisation of processes like bill submission, inspection, dispatches, receipt, bill
passing and bill payments, and warrantee monitoring.

Others

GeM

Reverse Auction

Standard Bid Document

Transformation Cell

Environmental Friendly Work

Contractors Measurement Book

Accrual Accounting

Service Contract GCC

TMS

Introduction of e-tender and self affidavit

Performance Costing

IPAS

Letter of Credit

Re-engagement of Retired Staff

Project Cell

E-inspection Module

Mission PACE

IRePS

Request for Qualification (RFQ)

Request for Proposal (RFP)

Train captain

Comprehensive housing policy

Sparrow- apars filling

Rail goods works portal

Disposal of Divisional scrap

This topics are the subject of discussion in last one year hence may be important.

Liberalised Wagon Investment Scheme (LWIS)

Customers should obtain approval from Ministry of Railways for procurement of Wagons under
LWIS. High capacity Wagons and Special purpose Wagons are the two types of Wagons that may be
procured under this scheme. Wagon leasing companies ( for leasing the Wagons to end users), End
users (for their own traffic only) and Logistic providers (exclusively for the end user company) are
the three types of investors that may procure Wagons.

Salient features

#Ministry of Railways approval is a must. Privately procured Wagons are inducted into service only
after completion of the mandatory safety and quality inspection by railway authorised agencies.
Railway may terminate the agreement with any investor procuring Wagons under the scheme on
payment of the residual value as assessed by railways.

#Maintenance of Wagons will be undertaken by IR on payment; haulage charges for moving DY

Wagons from a private terminal to the workshop will be Borne by railways.

#Fright concessions are permitted to the end users only, provided the investor has not availed of any
concession from any other ministry or from railway ministry under any other scheme.(HCW: 12% on
base freight rate for 20years; SPW: 15% on base freight rate for 20years )

#No freight will be charged for movement of empty rake to the next destination provided the
distance travelled by empty rake is less or equal to the distance travelled by the train before
unloading.

#Transport of coal, ores and Minerals will not be permitted in privately owned Wagons.

#HCW and SPW Wagons will not be merged in the Wagon pool of IR.

#Loading in Wagons procured under the scheme will be permitted only against Indians registered by
end users. if end user does not place any indent these Wagons will remain idol in his premises.

#If IR has to stable the rakes in railway yards stabling charges will be payable.

#If LWIS rake is detained in goods shed beyond the permissible free time , detention charges will be
levied.

#For using Railway goods shed , terminal access charges , detention charges and Ground charges are
levied.

#Detention charges and Ground usage charges will be treated on par with Demurrage and Wharfage
charges for the purpose of consideration of waiver.
IR will have no right to use these Wagons other than the end user. However, if an agreement exists
between Railways and Wagon leasing company for such usage, Railways can use Wagons for their
customers.

Long Term Tariff Contract (LTTC)

Object

The object of this scheme is to bring assured traffic to Railways and in turn the customers get
assurance of certainity in tariff rates as well as freight rebate on fulfillment of certain conditions. For
this purpose, the customers will have to enter into a long term contracts with Railways.

Salient features

#Eligibility: The customer should have loaded (both inward and outward) at least 1million tonnes per
annum in the previous year. New entrant should provide traffic of more than 3 million tonnes over
the entire agreement period; and at least one million tonnes during the first year itself. The
customer is not eligible to avail concurrent concession/ rebate under any other scheme. After
availing all concessions/rebates, the net freight should not be less than the freight applicable to
class -100. if a customer is getting benefit under discount schemes for a part of traffic then that
traffic will be excluded from LTTC scheme.

Agreement

# A customer can enter into agreement with multiple zonal Railways , provided the customer offers
a minimum of 1 million ton per annum traffic to each zonal Railway.

# Care should be taken to ensure that all plants of the customer within the zone are included in the
agreement, to prevent shifting of traffic from One location to another location within the zone only
for the sake of seeking concessions without any additional traffic to Railways.

Minimum Guarantee

# The customer shall provide minimum guaranteed gross freight revenue (MGGFR) it a commitment
to increase the freight revenue from the existing level.

# MGGFR for each year should be increased by minimum 5 % annually. MGGFR for first year should
be at least five percent more than the actual GFR of previous 12 months. MGGFR of the second and
third year should be at least 5% more than the MGGFR of preceding year.

# The agreement shall not be for less than 3 years and shall not be extended for more than 5 years
in total.

# Railway will grant rebate as per the graded rebate structure on actual GFR realised by the railway.
The percentage of rebate shall be based on the incremental growth in actual GFR over and above
the Benchmark GFR.

FFS: The ‘Freight Forwarder’ scheme is not in operation. The railways introduced the FFS traffic
system (2006) when it felt the shortage of wagon loading tonnage all over the country.
Then railways appointed agents from the marketing point of view to promote railway transport by
convincing the parties.

FFS agent was given ad valorem railway freight rates to be charged for the particular destination,
that is, freight per wagon with permission to club different commodities. IR could convince
corporate giants like Tata group and many oil companies to book their consignments through the
railway route.

Of course, under this scheme, the FFS agents were providing door to door facilities to the railway
route users and were helping to promote railway transport. The railways used to accept piece-meal
wagon traffic, but now railways are only accepting rake-load traffic.