Index

Chapter Topic Page

No.
No.
1. 1.1 Industry Indian Railway
Profile
History of Railways in India 8-12
Railway Zones and their Head Quarters
1.2 Company DRM Office Bhopal 12-13
Profile

1.3 Introduction Budget

of the topic
History of Railway in India
Railway Budget 2018
The Actworth Committee
The consolidated fund of India and
Compilation fund
Demand for grants
Budget planning
Compilation and scrutiny of budget in
the Railway Board
Submission to the Minister
Presentation to the Parliament
Appropriation Bill
Administering the Budget
Responsibility of Railway 13-29
Administration in case of Excess or
Lapse
Powers of Railway Administrations in
case of emergent and inevitable
expenditure
Powers of the Railway Board
Powers of the Railway Administration
Unforeseen Expenditure- operation

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 from the Contingency Fund of India
Gist of Railway Budget 2018-19
Railway Finance
Survey
Estimate
Tender 30-32
Contract
Bills payable and bills receivable
Measurement Books
2 2.1 Objective of
the study
2.2 Need & Scope
of the study 33
2.3 Research
Methodology
3 3.1 Suggestions 34-35
3.2 Findings
3.3 Conclusion
Bibliography 36

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 Chapter:-1

1.1 Industry Profile

Indian Railways
Indian Railways (Hindi: भारतीय रे ल Bhāratīya Rail), abbreviated as IR (Hindi: भा.रे .), is the
state-owned railway company of India, which owns and operates most of the country's rail
transport. It is overseen by the Ministry of Railways of the Government of India. Indian
Railways has more than 64,015 kilometres (39,777 miles) of track and 6,909 stations. It has
the world's fourth largest railway network after that of the United States, Russia and China. It
is one of the world's largest commercial or utility employers, with more than 1.6 million
employees. The railways traverse the length and breadth of the country and carry over 20
million passengers and 2 million tons of freight daily. IR owns over 200,000 (freight)
wagons, 50,000 coaches and 8,000 locomotives.

History of Railways in India

The core of the pressure for building railways in India came from London in 1840s. For a
century thereafter the basic policies and ultimate management of the Indian Railways were
issued from London. The British built railways in India in order to intermesh the economies
of the two countries. The building of railways in India brought about unintended as well as
hoped for con sequences in economic, political and military front. The new railways tied the
different parts of India together more closely than ever before. The first proposals for
construction of railways in India were presented in 1844 to East India Company in London
by (a) East Indian Railway (EIR) company which was headed by R. McDonald Stephenson,
and (b) Great Indian Peninsula Railway (GIPR) company. George Stephenson the great
British Locomotive inventor was one the first Directors of GIPR and his son Robert
Stephenson was appointed as the consulting engineer based at London.

Both E.I.R. and G.I.P.R were incorporated in England for the purpose of constructing railway
lines in Calcutta and Bombay presidencies respectively. Though GIPR company was formed
in 1844. George Stephenson could not see his Locomotives run on Indian soil as he died in
1848.

Some mention should be made of the role of Indian businessmen played in the early years.
There were Indian merchants, both in Calcutta and Bombay who took an interest in funding
of the railways. The most prominent of these was a remarkable Bengali merchant Prince
Dwarkanath Tagore, grandfather of Nobel laureate poet Rabindranath Tagore. Dwarkanath's
firm Carr, Tagore & Company is reported to have offered in 1844, to raise one-third of the
capital required for a railway from Calcutta northwest to the coalfields above Burdwan. After
Dwarkanath's premature death a few years later the other Indian businessmen played only a

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passive role. The conception, promotion and launching of India's railways were all by the
British. By the year 1845, two companies were formed and the East India Company was
requested to support them in the matter.

The credit from the UK investors led to the hasty construction of a rail system over the next
few years. On 22nd Dec' 1851, the first train came on the track to carry the construction
material at Roorkee in India. With a passage of one and a half years, the first passenger train
service was introduced between BoriBunder (Bombay) and Thana on the providential date
16th Apr' 1853. This rail track covered a distance of 34 kms (21 miles). Ever since its origin,
the rail service in India never turned back.
The British Government approached private investors and persuaded them to join the race
with a system that would promise an annual return of 5% during the early years of operation.
Once finished, the company would be transferred under the Government ownership, yet the
operational control will be enjoyed by the original company. In 1880, the rail network
acquired a route mileage of about 14,500 km (9,000 miles), mostly working through Bombay,
Madras and Calcutta (three major port cities).

By 1895, India had started manufacturing its own locomotives. In no time, different
kingdoms assembled their independent rail systems and the network extended to the regions
including Assam, Rajasthan and Andhra Pradesh. In 1901, a Railway Board was formed
though the administrative power was reserved for the Viceroy, Lord Curzon. The Railway
Board worked under the guidance of the Department of Commerce and Industry. It was
comprised of three members - a Chairman, a Railway Manager and an Agent respectively.

For the very first time in its history, the Railways instigated to draw a neat profit. In 1907,
most of the rail companies came under the government control. Subsequently, the first
electric locomotive emerged in the next year. During the First World War, the railways were
exclusively used by the British. In view of the War, the condition of railways became
miserable. In 1920, the Government captured the administration of the Railways and the
linkage between the funding of the Railways and other governmental revenues was detached.

On the occasion of India's Independence in 1947, the maximum share of the railways went
under the terrain of Pakistan. On the whole, 42 independent railway systems with thirty-two
lines were merged in a single unit and were acknowledged as Indian Railways. The existing
rail networks were forfeited for zones in 1951 and 6 zones were formed in 1952. With 1985,
the diesel and electric locomotives took the place of steam locomotives. In 1995, the whole
railway reservation system was rationalized with computerization.

And now after 155 years, the Indian Railways is in a tremendous look out for growth with
trains touching speeds as high as 130-150 km/h and prestigious trains like Rajdhani Express,
Shatabdi Express, Duronto Express and the SamparkKrantis covering the length and breadth
of the country. Many of the meter gauge tracks are being converted into broad gauge system,
unelectrified sections are being electrified and single line sections are being double d to
transport more passengers and goods.

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The construction of Konkan Railway on the west coast part of India was one of the marvels
of modern Indian Railways. This was a challenging task due to many mountains and rivers in
between. Though it took 7 years to complete laying of tracks in the 760 odd kms stretch, but
it reduced the travel time between Mumbai and Kerala by a great margin.

Railway zones & their Headquarters

Indian Railways is divided for administrative convenience into several regional railways.
Until recently there were 9 zones, and this structure had not changed much for four decades.
Recently, 7 new zones have been created, giving a total of 16.

S/No. Name of the Railway Zone Zonal Headquarter Division

1 Central Railway Mumbai 1) Mumbai

2) Nagpur
3) Bhusawal
4) Pune
5) Sholapur

2 Eastern Railway Kolkata 1) Howrah-I

2) Howrah-II3)
Sealdah
4) Malda
5) Asansol
6) Chitaranjan
7) Kolkata
Metro

3 East Central Railway Hajipur 1) Danapur

2) Mugalsarai
3) Dhanbad
4) Sonpur
5) Samastipur

4 East Coast Railway Bhubaneshwar 1) Khurda Road

2) Waltair
3) Sambhalpur

5 Northern Railway Baroda House, New Delhi 1) Delhi-I

2) Delhi-II
3) Ambala
4) Moradabad
5) Lucknow

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 6) Firozpur

6 North Central Railway Allahabad 1) Allahabad

2) Jhansi
3) Agra

7 North Eastern Railway Gorakhpur 1) Izzatnagar

2) Lucknow
3) Varanasi
4) DLW

8 North Frontier Railway Maligaon, Guwahati 1) Katihar

2) Alipurduar
3) Rangiya
4) Lumding
5) Tinsukhia

9 North Western Railway Jaipur 1) Jaipur

2) Jodhpur
3) Bikaner
4) Ajmer

10 Southern Railway Chennai 1) Chennai

2) Madurai
3) Palghat
4) Trichy
5) Trivendrum

11 South Central Railway Secunderabad 1)Secunderabad

2) Hyderabad
3) Guntakal
4) Vijaywada
5) Nanded

12 South Eastern Railway Garden Reach, Kolkata 1) Kharagpur

2) Adra
3)Chakradharpur
4) Ranchi
5) Shalimar

13 South East Central Railway Bilaspur 1) Bilaspur

2) Nagpur
3) Raipur

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14 South Western Railway Hubli 1) Bangalore
2) Mysore
3) Hubli
4) RWF/YNK

15 Western Railway Mumbai CST 1) BCT

2) Vadodara
3) Ahemdabad
4) Ratlam
5) Rajkot
6) Bhavnagar

16 West Central Railway Jabalpur 1) Jabalpur

2) Bhopal
3) Kota

17 Metro Railway, Kolkata kolkata -

1.2 Company Profile

DRM Office Bhopal
Bhopal railway division was formed on 1 April 1952 as part of then the Central Railway. It is
the second largest division of West Central Railway in terms of route kms, employee strength
and freight earning. It has total 95 stations of different categories. The important stations of
this division are Bhopal Jn of A-1 category, Bina Jn, Hoshangabad, Itarsi Junction, Vidisha,
Habibganjof A category and Guna, Ganjbasoda, Guna, Harda, Sanchi, Shivpuri of B category
cstations. Habibganj station of Bhopal is equipped with free Wi-fi facility and has been
awarded with the Best Tourist Friendly Station Trophy of IR in 2015.

Total route and track kilometerage of Bhopal division are 1016 and 1921, respectively. This
track is also supported by total 1587 bridges of all dimensions. The geographical extension of
Bhopal division lies completely in the state of Madhya Pradesh and on the map of Indian
Railways is Khandwa (excluding) - Itarsi double line electrified BG Sec.; Itarsi - Bina
double line electrified BG Sec.; Bina - Guna single line electrified BG Sec.; Guna -
Gwalior (excluding) single line non-electrified BG Sec.; Ruthiyai - Maksi (excluding)
single line non-electrified BG Sec.

Some important ongoing works falling in Bhopal division are new lines on Ramganjmandi-
Bhopal Sec. (262 Km.); doubling of Bina-Ruthiyai-Kota Sec. (282 Km.) and tripling project
of Bina-Habibganj-Barkheda-Budni-Itarsi Sec.(total 242 Km). The foundation stone of Diesel
Locomotive Traction Alternator Workshop has been laid in Vidisha of Bhopal division in

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2015 for the purpose of indigenously manufacturing some important components to be used
in Diesel Locomotives. Habibganj station has been chosen under Station Redevelopment
Programme.

The division has an Electric Loco Shed, having the holding capacity of 189 locomotives for
the maintenance of electric locomotives at Itarsi and a Diesel Loco Shed with capacity of 170
diesel locomotives at Itarsi. There are four Carriage and Wagon depots at Bhopal, Habibganj,
Bina and Itarsi and one ROH depot at Itarsi for routine overhauling of carriages and wagons.

12 Mail/Express and 4 Passenger trains originate from Bhopal division. Itarsi Jn is the busiest
operational point in the division for both passenger and good trains where a big Marshalling
Yard facilitates large scale movement of trains by receiving, sorting, reforming and
dispatching them. Itarsi Jn has stoppage of 330 trains daily. In FY 2015-16, total passenger
and freight earnings of Bhopal division stood at 3535 crand Rs. 997 cr, respectively. The
main freight earning of Bhopal division is from fertilizer, POL and food grains which is
loaded at Bina and Vijayapur sidings.

The work force of Bhopal Division is 16566 (as on March 2017). The administration of
division also runs two primary railway schools at Itarsi and 12 Bangla and one senior
secondary school at Itarsi.

Bhopal division has many famous tourist and pilgrim spots such as Bhimbetka rock shelter
(an archeological site near Bhopal) , Bhopal (known for Bhojeshwar temple, Manav
Sangrahalaya, Van Vihar, Bhopal taal, Birla temple, Taj-ul-Masajid, Kerwa dam, Ratapani
Tiger Reserve), Sanchi (for Stupas), Vidisha(known for Udayagiri caves and Udayeshvara
temple) and Madhav National Park near Shivpuri.

1.3 Introduction of the topic

Budget
Budget - A Constitutional and Management Document -Article 112(1) of the Constitution of
India prescribes that 'the President shall in respect of every financial year cause to be laid
before both the Houses of Parliament a statement of the estimated receipts and expenditure of
the Government of India for that year’ referred to as the "annual financial statement" and
popularly called the "Annual Budget". Though the constitutional requirement is only that the
'financial statement' shall contain a statement of the estimated receipts and expenditure for the
coming financial year, as a matter of practice, every budget contains three elements-

(a) a review of the preceding year, including the actual receipts and expenditure in that year
(b) an estimate of the receipts and expenditure of the coming year; and (c) proposals, if any,
for meeting the requirements of the coming year.

Though the Constitution does not provide for the presentation of the annual financial
statement or Budget in parts, the Rules of Procedure of Parliament have provided that
'nothing shall be deemed to prevent the presentation of the Budget to the House in two or

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more parts and when such presentation takes place, each part shall be dealt with in
accordance with the rules as if it were the Budget'. This provision has enabled the Separation
of the Railway Budget from the General Budget and the passing of separate Appropriate Acts
for each of these Budgets in keeping with the Separation Convention (1924). The Railway
Budget is, therefore, presented to both Houses of Parliament separately from and ahead of the
General Budget. Though the Railway Budget is separately presented to Parliament, the
figures relating to the receipts and expenditure of the Railways are also shown in the General
Budget, since the receipts and expenditure of the Railways are part of the total receipt and
expenditure of the Government of India.

A statement of estimated annual receipt and expenditure whether on Capital or Revenue

account of Central Government is prepared by the Railway Board (Based on individual
Railways estimated receipt and demands for expenditure) and laid before the parliament in
the form of demand for grants. In other words it can be said that under Article 112 of
constitution of India, the president will call upon a statement from railways showing the
estimate income and outlay amount that has to cross the consolidated fund of India. These
statements are known as “Budget”

1.3.1 History of Railway Budgeting in India

We all know that Railways was started in India during 1853 by the British. Nearly 50 years
after 1853, there were 33 separate railway administrations operating over 41,000 kilometres.
Of these, 4 were worked by the Government of India 5 by erstwhile Indian states &
remaining 24 by railway companies.

The non-government railways were operated under varying degrees of government

supervision, their regulations & controls vested in railway branch of Public Works
Department (PWD) of the Government of India. The department was headed by an officer of
Indian Civil Service, who was a member of the viceroy & Governor generalexcecutive’s
council. He was assisted in the railway branch by one secretary, three deputy secretaries, four
under secretaries and 4 assistant secretaries.

The entire railway system was divided into 7 circles. A team of consulting engineers and one
government examiner of accounts were posted to each of these 7 circles.

In October 1901, the secretary of state for India in council appointed Sir Thomas Robertson,
C.V.O as special commissioner for Indian Railways to enquire into and report on the
administration and working of Indian Railways. In the report, Sir Thomas Robertson
recommended setting up of railway board consisting of a President or chief commissioner
and two other commissioners all of whom should have practical knowledge of railway
matters. He also insisted that the board should be assisted by a secretary, a chief inspector of
railways, the necessary number of ordinary inspectors and the requisite number of
government auditors. These recommendations lead to a decision in early 1905 to abolish the

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railway branch of Public Works Department and to transfer the control of railway system to a
railway board consisting of a chairman and 2 others.

The railway board assumed office in March 1905 being directly responsible to the
government of India in department of commerce and industry and their staff included
amongst others an examiner of accounts, redesignated in the following years as railway
accounts officer. Later a separate post of ‘accountant general, railways’ was created after
abolishing the post of accountant general, PWD.

1.3.2: Railway Budget 2018

Finance Minister Arun Jaitley in his Union Budget 2018 speech has announced a capital
expenditure of Rs 1.48 lakh crore for Indian Railways for 2018-2019. That’s a jump of 23%
compared to the capex for the ongoing financial year 2017-2018. That’s a threefold increase
in capital expenditure from Rs 53,989 crore in 2013-2014 to Rs 1.48 lakh crore in 2018-2019
– something that Railway Minister Piyush Goyal had already hinted at. According to Finance
Minister Arun Jaitley, most of this increased capital expenditure would be focused on
capacity augmentation, a fact that will Indian Railways reduce congestion on existing
networks and enable timely and faster movement of goods and passengers. The Railway
Budget 2018 has also announced that a target of 92.8% operating ratio is being set for the
next financial year, as against 96% in the current FY. With a focus on safety, the total
expenditure planned on safety activities including is Rs 73,065 crore in 2018-19. From
electrification to conversion to broad gauge and steps for suburban railways, there are a host
of new steps that have been announced that will cheer common man.

Indian Railways is often called the lifeline of the country and an increase in capital
expenditure, focus on electrification, safety, gauge conversion and passenger amenities would
go a long way in augmenting traffic and therefore revenues of the national transporter.
According to Abhaya Agarwal, Partner Infrastructure & PPP Leader, “Focus on capacity
addition and service improvements through technology can be seen as a rationale move by
the government. It is commendable that skilling and capacity building have been prioritized.
Railways University and training center for high speed rails was announced in the speech.
Overall, it appears as if the government is considering holistic development of the sector.”
One would hope that with dedicated freight corridors being built as well, Indian Railways
will see better days ahead and will be able to offer its customers – both passenger and freight
– better service standards.

GDP Contribution: - GDP at current prices in Q1 of 2018-19 is estimated at Rs 44.33 lakh

crore, as against Rs 38.97 lakh crore in Q1 of 2017-18, showing a growth rate of 13.8
percent.

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The financial situation of Indian Railways
This year, the finances of the Indian Railways were presented along with the Union
Budget on 1 February, and are scheduled to be approved in the next few days. Here is a look
at some key issues and trends.

 Internal revenue generation has been declining

The railways’ internal revenue for 2018-19 is estimated at Rs2.01 trillion, 7% higher than the
revised estimates for 2017-18. The majority of this comes from freight and passenger traffic,
estimated at around Rs2 trillion. However, over the last few years, railways’ internal revenue
has been falling due to a drop in the growth of both freight and passenger traffic.

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  Expenditure on salaries and pension has been increasing
Railways’ operating expenditure for 2018-19 is estimated to be Rs1.88 trillion, up 4% from
2017-18. About 66% of this goes towards the payment of salaries and pensions. This
component has been gradually increasing, with a jump of about 15% in the last two years due
to implementation of the Seventh Pay Commission recommendations. The pension bill is
expected to increase further in the years to come, as about 40% of the railways’ staff was
above 50 years in 2016-17.

Rs500 crore has been allocated towards the Depreciation Reserve Fund, which provides for
the cost of new assets replacing the old ones. This is significantly lower than last year’s
allocation of Rs 5, 000 crore.

 Consequently, operating ratio has been on the higher side

Operating ratio is the ratio of working expenditure (expenses arising from day-to-day
operations) to revenue earned from traffic. A higher ratio indicates a poorer ability to
generate surplus that can be used for capital investments such as laying new lines and
deploying more coaches.

The operating ratio for 2018-19 is projected at 92.8%. In 2017-18 (revised estimates), it was
96%. In the last 10 years, the operating ratio has been around 94% on average, which means
the railways has been spending 94 paise on every rupee that it earns.

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  Capital expenditure is increasingly getting financed through
borrowings
With declining internal revenue, capital outlay gets financed through budgetary support from
the central government and borrowings. Till 2015-16, the railways paid a dividend to the
central government. In 2018-19, the gross budgetary support from the central government is
proposed at Rs 55, 088 crore, while borrowings are estimated at Rs81,940 crore. Therefore,
the majority of capital expenditure will be financed through borrowings (55%), followed by
budgetary support (37%), and only 8% from railways’ own internal resources. Experts have
noted that an increased reliance on borrowings will further exacerbate the railways’ financial
situation.

1.3.3 The Acworth Committee

One of the most important landmarks in railway finance was the report submitted by the
Acworth Committee. The Acworth Committee aimed at separating the railway finance from
the general finances of the government. Accordingly, a resolution was adopted by the Central
Legislative Assembly on 20th September, 1924 as a convention. This resolution provided for
a separate railway budget and was known as ‘separation convention’.

So therefore the railway budget was separated from the general budget and it is presented on
both houses of the parliament separately ahead of the general budget. So every year,
estimates of receipts and expenditure (cumulatively called the ‘Budget’) of railways are
presented to the parliament by the railway minister of India.

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1.3.4 The consolidated fund of India and contingency fund
All receipts of railways from fees, taxes and all other sources get credited to the consolidated
fund of India. No money can be withdrawn from the consolidated fund, except as per the
procedure laid down in the constitution. Even the salary of staff cannot be taken from the
station earnings as all these receipts become the part of the consolidated fund of India.

 All earnings and expenditure forms part of Consolidated Fund of India.

 Unforeseen expenditures like protection of life and property, restoration of lines due
to accidents etc. is met from the Contingency Fund held by the President and Post
facto sanction of Parliament is obtained to recoup Contingency Fund

1.3.5 Demands for Grants

The estimates of expenditure are to be presented in the form of ‘Demand for Grants’ to the
LokSabha. The railway budget totally involves 16 demands. The parliament then discusses
the details of each of demand and the members have the right to propose motions for token
cuts in the amount asked for in the demands. Cut motions are motions to reduce the amounts
for demand for grants. The object of a cut motion is to draw the attention of the House to the
matter specified therein. After the process of ‘demand for grants’, the request for the total
amount of money to be appropriated from the consolidated fund of India to meet the railway
expenses is presented to the parliament in the form of Appropriation Bill (Railways).

Once this Bill is passed and is signed by the President of India, it becomes the Act. Only after
this and withdrawal from the consolidated fund of India is possible during the financial year.
So therefore it is necessary that the entire parliamentary procedure of passing the budget is
completed before 31st March.
The following explains various demands under ‘Demand for Grants:
1 Railway Board
2 Miscellaneous expenditure
3 General Superintendence and Services
4 Repairs and Maintenance of Way and Works
5 Repairs and Maintenance of Motive Power (Locomotives)
6 Repairs and Maintenance of Carriage and Wagons
7 Repairs and Maintenance of Plant and Equipment
8 Operating Expenses- Rolling Stock and Equipment
9 Operating Expenses- Traffic
10 Operating Expenses- Fuel
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11 Staff Welfare and Amenities
12 Miscellaneous Working Expenses
13 Provident Fund, Pension and other Retirement Benefits
14 Appropriation to Funds

15 Dividend to General Revenues, Repayment of loan taken from General Revenues and
Amortization of over-capitalization
16 Assets-Acquisition, Construction and replacement.

1.3.6 Budget planning (process)

Budget process starts at once after realising all the needs and thereby making subsequent
plans for the needs. Each railway zone will have its own needs right from a smaller one to a
very big one. The need or a requirement is realized by the filed officer through passenger
complaints/suggestions, through maintenance engineers or by himself. Maintenance
engineers are present at every 100 kilometres across the length and breadth of the country.
Based on their observations and requirements of passengers, they communicate the need to
the filed officer. The filed officer then analyses the need or the requirement and depending
upon the amount he may himself sanction it or may forward it to Divisional Railway
Manager (DRM) or General Manager (GM).
In Indian Railways, planning for the budget 2 years hence starts in advance. For e.g. process
and planning for the railway budget 2012-2013 starts from 2010-2011. So for the budget
recently presented for the financial year 2010-2011, the planning and process would have
started in 2008-09.

If the amount of a ‘work’ exceeds Rs. 5 crores, then it may be sent to the railway board for
sanctioning. If the amount exceeds Rs. 50 crores, then it is referred to the Planning
Commission for further approval. All the ‘works’ costing above Rs. 2.5 crores are published
in the Pink Book of Railways.

The entire responsibility for framing the estimates devolves upon the spending/earning
authorities concerned, though the actual work of compilation and scrutiny would rest with the
Financial Adviser and Chief Accounts Officer who would draw the attention of the General
Manager to matters of purely financial import. The estimates should be as accurate as
possible and to achieve this object care should be taken to see that data on which the forecast
is made is adequate and reliable and that the conclusions arrived at from the data can be
sustained by past experience and future expectations of likely events. The proposal of works
of new lines, gauge conversion, doubling and electrification are initiated at the railway board
level. Railway zones do not propose these works. Railway zones prepare the works program
on the basis of ceilings and norms communicated by the railway board.
A table below gives an idea about the schedule of the budget process and planning.

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On the basis of the proposals of works sent by various railway zones, the railway board
scrutinises the proposals and depending upon the work, it may or may not sanction the
amount. If the railway board sanctions the amount, it is understood that the board is satisfied
with the proposal and completion of the work. Sometimes the railway board’s estimation may
differ with the zonal railway’s estimate of the work and if the zonal railway estimate is more
than the board’s estimate, the railway board will sanction the amount as estimated by the
railway board. In cases where the railway board does not accept a proposal and does not
sanction the amount for the same, the railway board will communicate with the respective
zonal railway and convey them why it was not sanctioned. And if the zonal railway feels that
the particular work which was not sanctioned is of utmost importance, then it can
communicate with the railway board again and explain the board the importance of that
particular work for which the railway board refused a sanction.

For the preparation of Budget by the railway board, the railway administration and other
authorities empowered to incur expenditure are required to submit to the railway board their
revised estimates for the current year and budget estimates for the ensuing year. The revised
estimates are required in respect of the current year and the budget estimates for the
following year. Revised estimates are required where the estimates are already sanctioned
and already the works are executed or which are in progress. These require revision due to
change in the scope of work while execution and requires to incorporate all those scope into
sanctioned estimate.

There is a beautiful system in Indian Railways through which the expenditure required for
next year will be assessed and the accumulated cost from all the zones will be decide for next
year’s Budget.

Budgeting exercises
The steps involved in presentation of Railway Budget are:-

i. Preparation of budget
ii. Voting of budget
iii. Execution of budget
iv. Review of budget as executed

Voting and Review of budget are parliamentary functions where as preparation and
executions are primarily the function of executive at divisional and higher levels.

The revised and estimate budget should be framed by the various concerned authorities in
keeping with the instructions given below:
1. Gross Receipts
2. Ordinary Working Expenses
3. Payment to Worked lines

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4. Appropriations to and expenditure to be met out of Railway Funds
5. Payment to General Revenues
6. Works Expenditure
7. Civil Estimates

Gross Receipts
The estimates of Gross Receipts should be prepared in quadruplicate in the prescribed form
and the figures to be mentioned in thousands of rupees. Gross Receipts includes Coaching
Earnings, Goods Earnings, and Sundry Other Earnings etc. These are the earnings from each
class of passenger traffic, commodities carried, catering etc.

Ordinary Working Expenses

These are the expenses incurred on operations, repairs, maintenance, fuel, staff welfare, staff
benefits etc. The Railway Board should be furnished with the summary of the ordinary
working expenses comparing, under each demand, the actuals during each of the preceding
three years, with budget estimates and revised estimates for the current year and budget
estimates for the ensuing year.

Appropriations to and expenditure to be met out of Railway

Funds
It comprises various Railway Funds which are budgeted whether for appropriations to or
expenditure from the funds. These include Depreciation Reserve Fund (DRF), Revenue
Reserve Fund (RRF), Development Fund (DF), Pension Fund and Accident Compensation,
Safety and Passenger Amenities Fund (ACSPF). These funds are financed from internal
sources of railways except where in the absence of adequate revenue surplus, temporary loans
have to be obtained from the General Revenues to meet the obligations of Development Fund
and Revenue Reserve Fund. Except in case of Pension Fund and Accident Compensation,
Safety and Passenger Amenities Fund for which revised and Budget estimate are prepared by
and appear in the Budget statements of the individual Railway Administration. The
responsibility of framing the revised and budget estimates for other railway funds lies with
the Ministry of Railways. A brief explanation of these funds is given below:

1. Depreciation Reserve Fund (DRF):

Since Indian Railways is not subject to income tax, they put depreciation amount in a reserve
fund called the Depreciation Reserve Fund. Indian Railways uses this money for meeting the
cost of replacement and renewals of depreciated assets. It was set up in 1924.

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2. Revenue Reserve Fund:
Revenue reserve fund if left over after payment to the General Reserve is added to the
Revenue Reserve Fund. If no surplus is available, then temporary loans are obtained from
General Revenues.

3. Development Fund (DF):

It was started in 1946 as ‘Betterment Fund’ and was renamed as Development Fund from
1950. It finances the cost of amenities for passengers and also for labour welfare.

4. Pension Fund:
It is another reserve fund in which Indian Railways contribute a large amount every year. It
was started in 1964.

Payments to General Revenues

It arises in respect of dividend on Capital-at-charge, contribution for grants to States in lieu of
passenger fare tax, repayment of loans and interest borrowed on a temporary basis from
General Revenues to finance Development Fund and Revenue Reserve Fund.

Capital-at-charge is given by the General Exchequer through Central Government’s Budget

for which Railway have to pay interest which is termed as dividend.

1.3.7 Compilation and scrutiny of budget in the Railway Board

The estimates of working expenses are subject to critical examination by the Railway Board
and after taking all the relevant factors into consideration, the Railway Board prepare their
own estimate of expenditure. The procedure adopted by the Railway Board in fixing the
allotment for each railway is as follows:

 The revised estimate for the current year is first fixed under each demand for each
railway after taking into the account the expenditure for the preceding year and
comparing the expenditure for the first seven months of the current year with the
corresponding period of the previous year.
 Having thus fixed the revised estimate for the current year, the budget estimate for the
next year is prepared on a consideration of special circumstances so far known for
both years.

The estimate of expenditure on rolling-stock, plant and machinery, structural and other
engineering works submitted by the railways after having been carefully examined by the
Railway Board as to the necessity and justification of the works there in are discussed with
the railway administration and the work to be undertaken during the budget year be decided
upon.

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1.3.8 Submission to the Minister
The estimated amount required for Plan expenditure during the next year is intimated to the
Planning Commission/ Ministry of Finance for necessary provision being made in the ‘Way
and Means’ budget of the Government of India and after it has been ascertained from
Planning Commission. The rolling stock and plant and machinery programmes, as approved
by the Minister, are subject to further modifications which may subsequently necessary due
to the following cause:

 If any item of rolling stock and plant and machinery ordered for delivery in the
current year is not delivered before the end of the year and remains unpaid , it
becomes necessary to provide money in the programme for the next year for such
items as will be delivered in that year.

Of the proposed modifications, the important ones, if any, are however, specifically brought
to the notice of the Minister before presentation of the budget to the Parliament. The
estimates of working expenditure as fixed by the Railway Board each railway and those of
expenditure on works, plant and machinery and rolling stock as finally settled are
consolidated under the respective ‘Demand for Grants’ and submitted to the Minister before
presentation to the Parliament.

1.3.9 Presentation to the Parliament

The complete Budget which includes the ‘Demand for Grants’ and detailed estimates of each
railway along with a summary will be presented to the Lok Sabha and Rajya Sabha by the
Railway Minister. Before the ‘Demand for Grants’ are submitted to the Parliament, the
recommendations of President should be obtained.

1.3.10 Appropriation Bill

After ‘Demand for Grants’ have been voted in the LokSabha, there shall be introduced a bill
to provide for the Appropriation out of the ‘Consolidated Fund of India’ of all money
required to meet the grants so made by the LokSabha and the expenditure, if any, charged
statement previously laid before the Parliament. The Appropriation Bill as passed by the
Parliament and assented to by the President forms the basis of budgetary allocation to the
railways.

1.3.11 Administering the Budget

Distribution of funds by the Railway Board:
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

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Administrations and other authorities subordinate to them, as soon as possible, after the
Budget is sanctioned. The sums so distributed are called "Allotments" and the orders by
means of which the allotments are made are called "Budget Orders". The allotments made out
of funds voted by the Parliament are shown as "Voted" and those fixed by President are
shown as "Charged". The Budget allotment made to a railway administration is intended to
cover all charges, including the liabilities for past years, to be paid during the year or to be
adjusted in the accounts for it. It shall be operative until the close of the financial year. Under
the 'doctrine of lapse', any unspent balance shall lapse and shall not be available for
utilization in the following year. 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 and distributed
by the Railway Board.

Distribution of funds by the General Managers to Lower Authorities

A General Manager is expected to take steps immediately to distribute the funds, placed at
his disposal, to authorities subordinate to him in such manner as he may consider most
suitable, provided that the total of the sums so allocated does not exceed the total of the grant
placed at his disposal. In making this initial distribution, he may, at his discretion keep a sum
unallotted as a reserve for emergencies that may arise in future. He may also vary the initial
distribution as necessity arises during the course of the year. The authorities to whom funds
are distributed by the General Manager may, subject to any general or special instructions
issued by him, redistribute the fund placed at their disposal to the authorities under them. No
expenditure shall be incurred by an authority without the allotment of necessary funds. The
authority to whom the funds are allotted, shall be responsible to report at once to the next
higher authorities the probability of any lapses or excesses over the sums placed at their
disposal. The expenditure on each work shall be limited to the sum allotted for it. If for
exceptional reasons, expenditure in excess of Budget allotment has to be incurred and if the
authority incurring the expenditure is either not in a position to find funds by reappropriation
or is not empowered to sanction a reappropriation therefore, application for additional funds
shall be made to the next higher authority stating how the expenditure is proposed to be met.
The transfer of funds, originally assigned for expenditure on a specific object to supplement
the funds sanctioned for another object is called "Reappropriation". In doing so it should
invariably be explained why the need for the expenditure was not foreseen in time for
inclusion in the budget and why the outlay cannot be postponed to the next financial year.

1.3.12 Responsibility of Railway Administration in case of Excess or Lapse

The railway administrations shall be responsible to ensure that no expenditure is incurred in
excess of the Budget allotments made to them. Should it become apparent at any time that the
grant for the year is likely to be exceeded from any cause whatsoever, the General Manager
should report the position to the Railway Board and apply for additional funds. No liability

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may be incurred in one year against anticipated grants of a succeeding year. It shall also be
the duty of the administrations to see that the allotments made to them are fully expended, in
so far as is consistent with economy and the prevention of large expenditure in the last
months of the year for the sole purpose of avoiding lapses. They shall be responsible for
ensuring that money which is not likely to be needed during the year is promptly surrendered
so as to allow of its appropriation for other purposes.

1.3.13 Powers of Railway Administrations in case of emergent and

inevitable expenditure
In certain cases where the commencement of work is urgently necessary to safeguard life or
property or to repair damage to the line caused by flood, accident, earthquake or other
unforeseen contingency, so as to restore or maintain through communication may be
authorized by the Executive Engineer; but he should at once submit a report through the usual
channel to the authority competent to give administrative approval to the work and to allot
the required funds. Expenditure to meet a sudden increase in traffic or for ensuring the safe
operation of traffic may be incurred with the personal sanction of the General Manager in
anticipation of the allotment of necessary funds by the Railway Board provided that the
Financial Adviser and Chief Accounts Officer concurs. This power cannot be delegated and
can be exercised by the General Manager only where the expenditure is within his powers of
sanction. In all cases where this requires an allotment of additional funds, a report showing
the expenditure involved and the additional funds required should be submitted to the
Railway Board, as soon as possible.

1.3.14 Powers of the Railway Board

Within the amount of a grant as voted by the Parliament, the Railway Board have full power
of transferring the provision from one sub-head to another by a formal order of
reappropriation, but reappropriations from one grant to another are not permissible. Under
Grant No. 16 no reappropriation of funds is permissible between Capital, Railway Funds and
Revenue even though reappropriation is permissible between the various sub-heads of grant
viz. the various Plan heads. As regards "Charged" expenditure, there are no restrictions on the
powers of the Railway Board to transfer provision from one sub-head to another by a formal
order of reappropriation, but no reappropriation is permissible from one grant to another or
from "Charged" heads to "Voted" heads or vice versa.

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1.3.15 Powers of the Railway Administration
Reappropriations, other than those which require prior board approval may be sanctioned by
the, railway administrations but no reappropriations are permissible after the close of the
financial year, i.e., 31st March. The reappropriations by railway administrations should not
be, made haphazardly on the basis of individual items of expenditure where the original
provision is exceeded, not should they be postponed to be made only towards the end of the
year. The railway Administrations should review the position as a whole at intervals and
carry out the necessary reappropriations. When funds have to be provided for new
expenditure under one of the sub-heads and the administrations are definitely in a position to
transfer the grant from another sub-head for this purpose, the appropriations should be made
promptly. The whole object is to ensure that, as far as possible, funds which are not required
are withdrawn from disbursing officers as soon as it is definitely known that they are not
required, and incidentally to provide that any really unavoidable expenditure is met from such
savings as far as possible.

1.3.16 Unforeseen Expenditure: - operation from the Contingency Fund of

India
Unforeseen expenditure which cannot be met by reappropriation from the existing grant and
expenditure on a “New Service /New Instrument of Service " not contemplated in the budget,
shall be met from out of the balance in the Contingency Fund of India placed at the disposal
of the Financial Commissioner for Railways. New Works estimated to cost more than Rs.50
lakhs each are treated as “New Service/New instrument of Service’. Likewise, relatively large
expenditure arising out of important expansion of an existing activity is treated as ‘New
Instrument of Service’, which is a slight variant of the term ‘New Service’. Applications for
advances required by the Railways shall be made to the Financial Commissioner for
Railways giving the following particulars: -

1. Brief particulars of the additional expenditure involved;

2. The circumstances in which provision could not be included in the Budget;
3. Why its postponement is not possible;

4. The amount required to be advanced from the fund with full cost of the proposal for
the year or part of the year, as the case may be.
So in these ways the various activities for making a budget are exercised by various
authorities. As seen right from bottom level till the top level employees are involved in
preparing the budget which is presented in the Parliament by the Railway Minister.

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 Gist of Railway Budget 2018-19
Announcing the railways component of the annual Budget on Thursday, 1 February 2018,
Finance Minister Arun Jaitley allocated Rs 1.48 lakh crore, up from last year’s Rs 1.31
lakh crore.
“We will electrify 4,000 km of railway lines. Around 18,000 km of double line tracks will
also be laid in 2018," Jaitley announced.
“As many as 12,000 wagons, 5,160 coaches and 700 locomotives are being procured.
There are significant achievements of physical targets by Railways,” he added. The
government also announced its intention to increase India's 124 airports to five times that
number.
The Finance Minister also announced a 'Safety First' policy with allocation of adequate
funds under Rashtriya Rail SanrakshaKosh and a bonanza for suburban commuters in
Mumbai and Bengaluru.
In some good news for Mumbaikars, Jaitley announced that the government would spend
around Rs 11,000 crore on upgrading the city’s train systems. The Mumbai suburban rail
will get 90 additional km of double line.
Following the announcement, Maharashtra Chief Minister DevendraFadnavis expressed
his gratitude to the NarendraModi government, adding that a total amount of Rs 40,000
crore would be dedicated towards “enhancing transportation in the city, with expansion of
suburban railway system & new airports.”
Similarly, Rs 17,500 crore was allocated to develop a 160-km suburban railway network
in and around the Bengaluru.
Additionally, Jaitley said that rail stations with a footfall of more than 25,000 would have
escalators. The redevelopment of 600 major railway stations would also be taken up by
the government. All trains would also soon have state-of-the-art facilities such as WiFi
and closed circuit television (CCTV) cameras, he said.
Further, the government also aimed to do away with 4,267 unmanned crossings in the
next two years. Around 18,000 kiometres of railways tracks are set to be doubled in a bid
to eliminate capacity constraints. “Over 36,000 km of track renewal is being targeted in
2018-19,” said Jaitley.
The Finance Minister also pointed out that 600 stations have been earmarked for
modernisation by the Railways. Laying out a roadmap for the Indian Railways, Jaitley
said the focus would be on modernisation of signalling, use of fog safety devices, better
passenger amenities, and safety in the coming year.
However, no major new trains were announced and the focus was more on modernisation
and passenger safety. The 92- year-old practice of a separate Railway Budget was
discontinued last year and merged with the Union Budget.

 Rs 1.48 lakh crore has been allocated for Indian Railways. Most of this capex will be
dedicated to capacity creation.
 12,000 wagons, 5160 coaches and 700 locomotives are on the way. A major
programme has also been initiated by the government to strengthen infrastructure at
the Goods sheds and fast track commissioning of private sidings.

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 Optimal electrification of railway network is a priority. Along with that the
government is focused on Physical targets of Indian Railways and has targeted 4,000
km of commissioning during 2017-18.
 Work on dedicated East and West freight corridors are in progress.
 Government plans to create world-class modern train sets including Train 18 and
Train 20. Train 18 and Train 20 will be manufactured at Integral Coach factory,
Chennai, announced in Union Budget 2018.
 Government plans to eliminate 4,267 unmanned railways crossing in next two years.
 For Passenger security, Wi-Fi, CCTVs in all stations and trains will be introduced.
 Modern train sets with state-of-the-art amenities are being designed at Integrated
Coach Factory in Perambur and first such train-set will be commissioned during
2018-19.
 For Mumbai local trains, an amount of Rs 11,000 crore has been allocated to add 90
kilometres of double line tracks.
 18,000 km of doubling, third and fourth line works and gauge conversion of 5,000 km
would be done in order to eliminate capacity constraints. In addition to that, complete
conversion of entire network into Broad Gauge to take place.
 Under Rashtriya Rail SanrakshaKosh, a ‘Safety First’ policy is a key for the
government to optimise passenger safety.
 Track infrastructure is necessary and for that the government has targeted over 3,600
km for track renewal.
 Other technology based measures will be taken by the government like ‘‘Fog Safe’’
and ‘‘Train Protection and Warning System’’.
 600 major stations to be redeveloped by Indian Railway Station Development
and escalators will be introduced to railway stations with more than 25000 footfalls.
 In addition, 150 kilometers of suburban network is being planned at a cost of over Rs
40,000 crore, which will include elevated corridors on some sections.
 A 160 kilometers (approx) suburban network at an estimated cost of Rs 17,000 crore
is provided for the growth of the Bengaluru metropolis.
 An institute to train manpower for high speed rail projects will be set up in Vadodara,
as the foundation stone of Mumbai-Ahmedabad bullet train project, India’s first high
speed rail project was laid last year.

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 Railway finance
The railway convention committee is an ad hoc committee constituted from time to time on a
resolution adopted by loksabha and concurred in by rajyasabha.

At present financial commissioner of railway is Shri A K Prasad.

The railway finances were separated from the general finances in India in 1924. By a
resolution adopted in September 1924, the central legislative assembly approved what is
commonly known as “separations convention” providing for a definite annual contribution
from the railways to the general revenues which was to be the first charge on the net receipt
of the railways. The working of the “separation convention” was revised from time to time by
the committees appointed by the legislative assembly.

The railways convention committee constituted in 1949 was the first committee after
independence. since 1954, each loksabha has been having a railway convention committee.
The committee becomes functus officio after presenting its final report regarding rate of
dividend.

Railway Survey
The survey may be defined as an investigation to be carried out before the commencement of
construction of a new Railway line.

To construct anything haphazardly is not engineering. Prior to survey the available maps of
proposed area are studied. This helps in fixing suitable alignment facilitate various surveys
work. The various engineering surveys which are carried out for the choice of route of a new
railway line survey can broadly be divided in to three categories.

1. Reconnaissance Survey
2. Preliminary Survey
3. Location Survey

Estimate
The execution of work in railways includes various stages of processing, starting with the
preparation of Abstract Estimate, its concurrence sanction; proportion of detailed, its
concurrence sanction and finally the tender and the agreement.

Financial concurrence includes the financial viability with respect to the total cost of work.
Concurrence and verification of an estimate is part of finance function.

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An estimate is a statement prepared to gauge an idea of expenditure to be incurred on a
work in order to obtain sanction of the competent authority and also to see that work is
financially justified.

Indian Railways prepare seven kinds of estimates to serve different objectives which are
outlined below:

1. Abstract Estimate
2. Detailed Estimate
3. Supplementary Estimate
4. Revised Estimate
5. Project Abstract Estimate
6. Construction Estimate
7. Completion Estimate

Tender
The tender is a notice to all business concerns to enable them to give quotations for supply of
stores as well as for execution of engineering works. Such notice in case of large works
should not be less than one month and for other works should not be less than 14 days.

In order to obtain be cheapest, economical and competitive rates tender system is adopted.
There for, while adopting this effective method very careful and serious consideration shall
we made.

Classes of Tenders
1. Open Tender
2. Limited Tender
3. Single Tender
4. Global Tender

Contract
Under the Contract Act, 1872, when two or more persons have a common intention
communicated to each other to create some obligation between them it is said to be an
agreement. Such agreement which are enforceable by law are known as ‘contract’. “only
those agreement are enforceable by law which are made by free consent of parties, competent
to contract for lawful consideration and with lawful object and are not expressly declared to
be void.

Type of Contracts
1. Works contracts
2. Stores contracts

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 FORMS OF WORKS CONTRACTS
 Lumpsum Contract
 Schedule Contract
 Piece Work Contract

Bills Payable and Bills Receivable

A statement of claims in prescribed form prepared by the firm for the supplies made or
services etc. rendered or by railway administration for recovery of charges from outsiders are
known as Bills.

Bills which are payable by railways are referred to as “bills payable” and which are
recoverable for the service render by railways are known as bills receivables.

Bills payables are: vendor’s bills, rent bills, petty purchase bills, and other miscellaneous bills

Bills receivables are: lease and licence, actual maintenance charges for sidings and level
crossings, on level crossing and wages of gateman, water charges bills and other
miscellaneous bills.

Measurement Books
The observance of rules regarding maintenance of these books as prescribed and also printed
in the measurement books should be seen. As these are important books required to be
produced in a court of law if occasion arises, the maintenance of these books strictly
according to instructions should be checked. The instruction for safe custody of completed or
standard measurement books are rigidly followed the calculation of actual measurement
should be checked and verified with paid contractors bills related to month selected for
check.

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 Chapter: - 2
2.1: Objective of the study
 To study about the whole process of budget in west central railway (how the budget is
prepare by the organisation and passed by the parliament).
 To examine the various aspects related to budget (Capital Revenue, Capital
Expenditure, etc.)
 To study about the maintenance of finance by west central zone. (Capital
Expenditures, Capital Revenue.)
 To understand and appreciate the ‘Effective planning, decision making and
forecasting’ mechanism in Indian Railways.

 To understand why Indian Railways facing money shortage, passing from difficult
phases.

 To analyzed the method of maintenance of various financial A/C.

2.2: Need & Scope of the study

 This report will help us to understand the current scenario of west central railways
related to budget.

 This project covers the history of Railway Budgeting in India, the process of Railway
Budgeting right from realising the ‘need’ till presentation of the budget in the
parliament.

 Towards the end it covers the gist of the Railway Budget 2017-2018 and certain
financial facts of the same.

2.3: Research Methodology

Primary Data:
 To meet the divisional railway office at Bhopal.
 To meet with railways employees union.

Secondary Data:
 Secondary data was obtained from referring books and websites(Site of ministry
railway )

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 Chapter:-3
3.1: Suggestions
Indian railway is having a lot of work on their finance related activities/works like:
maintenance of expenditure, capital revenue, and also does the planning for the new railway
line but the works are not implemented properly.

So after a long study, according to my point of view I am recommending some suggestions

which are as follows:

 Railways facing money shortage, passing from difficult phases, so for the solution of
this problem railways should maintain their capital revenues.

 We citizens also have certain duties towards the Railways. Railways are our property
and we should take care of it. Railway properties and premises become an easy target
for us during riots and strikes. And we ourselves blame the Railways for lack of
facilities. If we citizens go on a damaging spree, how can Railways provide better
facilities? If we litter in the Railway premises, how can we get world class stations?
So apart from the Railways and the government, even we citizens should take care of
our duties. If all these three join hands, we can definitely take the Railways ahead and
see our train running at top speeds and relish the presence of world class railway
stations and facilities!
 Indian Railways is often called the lifeline of the country and an increase in capital
expenditure, focus on electrification, safety, gauge conversion and passenger
amenities would go a long way in augmenting traffic and therefore revenues of the
national transporter.

3.2: Findings
 The financial situation of Indian Railways is not good they are facing lots of problem
related to finance like:
a) Internal revenue generation has been declining
b) Expenditure on salaries and pension has been increasing
c) Consequently, operating ratio has been on the higher side
d) Capital expenditure is increasingly getting financed through borrowings

 Through this project, I was briefly looking into the budgetary activities and procedures
involved which makes up a good budget.

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3.3: CONCLUSION
A budget is a list of all planed revenues and expenses. Budget is important to Indian
Railways as it has a vast operational system spread across the length and breadth of the
country. It enables the actual financial operation of the Railways to be measured against the
forecast. Every year the Railway Minister presents the Railway Budget in the parliament in
the month of February. Railways in India dawned in 1853 and ever since its origin, it has
never turned back As per the recommendations of the Acworth Committee, the railway
finances were separated from the general finances of the government through a ‘Separation
Convention’ in 1924 and hence Railway Budget is separately presented in the parliament
before the General Budget. Today Railways has over 64,000 route kilometres across India
and is considered as the ‘Lifeline of the country’. For proper planning, decision making and
allocation of resources, proper budgeting is necessary. Budgeting in Railways is not a day’s
or a week’s job. It involves many people and has many steps and procedures which need to
be followed systematically so that the Railway Minister can present a sound and a competent
budget in the parliament but now after merger of railway budget with the union/ annual
budget it is now presented by finance minister. The role of competent workforce and proper
flow of information is most necessary to make a good budget. Indian Railways’ budget boasts
about huge figures which is definitely higher than the budget of many small nations. Through
this project, we will briefly look into the budgetary activities and procedures involved which
makes up a good budget. We will also discuss the gist of the Indian Railways’ Budget 2018-
19. FM Arun Jaitley in his Union Budget 2018 speech said that developing infrastructure –
including railways – would continue to a priority for the Modi government. From world-class
train sets to bullet trains and revamp of signalling systems and providing CCTVs and Wifs –
FM Jaitley’s portion of Union Budget speech dedicate to Railway Budget helped several
promises that aim at transforming Indian Railways. Last year, for the first time in
Independent India, finance minister Arun Jaitley presented the combined Fiscal Budget 2017-
18 in the parliament as the 92 year old custom of presenting separate railway budget and
general budget was removed. Suresh Prabhu, the former Railway minister before Piyush
Goyal, became the last railway minister under the Modi regime to announce the Railway
budget separately. Indian Railways which is the national mode of transport is a massive
sector in terms of economy and employment. Every year an impressive amount is provided
by the government for the development of Railways and to improve Rail network across
India.

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financial-situation-of-Indian-Railways.html

 (2018). Railway accounting, finance and administration.

 Sharma, K. P. Railway Financial Rules. In Railway Financial Rules by K P

Sharma.

 Work hand book- GCC- Indian railways. In work hand book- GCC.

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