The AR project witnessed a serious thrust only around December 2014/January 2015 when the railway ministry started implementing accrual accounting pilot in Ajmer division
GN Bureau | February 3, 2017
The urgent need of implementing Accounting Reforms (AR) in Indian Railways (IR) is widely recognized and accepted, said a Niti Aayog note.
The note by economist and Niti Aayog member Bibek Debroy and Niti Aayog official Kishore Desai said that the AR project in Indian Railways has been on the anvil since 2003 when it was first mentioned in the Railway Budget speech by the then minister of railways.
However, due to various reasons and lack of a “mission mode push‟, the project lingered on and could not be really implemented on-ground over the last so many years.
Read: Railways is best example for big bang reforms, says Suresh Prabhu
The AR project witnessed a serious thrust only around December 2014/January 2015 when the railway ministry started implementing accrual accounting pilot in Ajmer division and Ajmer group of workshops. The scope of the Ajmer division pilot was later expanded to include entire North Western Railway (NWR). The Budget speech 2015-16 articulated the AR vision and included Performance Costing and Outcome Budgeting modules besides developing financial accounts on accrual basis. In the budget speech of 2016-17, MR further announced implementing the project in a “mission mode” and “Mission Beyond book-keeping” was instituted. Pursuant to this, an implementing organization co-ordinated by the AR cell at the Railway Board got set up and RCF Kapurthala was identified for pilot implementation of accrual accounting.
Read: Railway budget is history. Here’s the rationale behind ‘budget reforms’
The note said that there has been a reasonable progress towards implementing AR on ground over the period December 2014 to December 2016. The pilot project of creating financial accounts on accrual basis at NWR is complete. The output documents that include Financial Statements (Balance sheet, cash flow and P&L account), significant accounting policies, notes to accounts & disclosures, accrual accounting implementation manuals etc. have been released and are being shared with all zonal railways for reference and implementation roll outs.
AR Project, as it is being undertaken, comprises three distinct modules. Module 1 relates to preparation of financial accounts of Indian Railways on “Accrual Basis”. This refers to preparing financial statements in a manner that a transaction is recognized in books of accounts at the time it happens. This is in contrast with the current practice of preparing accounts which recognizes a transaction in the event of cash flows.
Module 2 relates to development of a Performance Costing framework that could help assess costs of various activities (business-wise /service-wise etc.) undertaken by Railways in an objective manner.
The last module – Module 3, relates to Outcome Budgeting, which refers to a framework that links financial outlays with specific outcomes.
Read: Niti Aayog note on Status of Accounting Reforms in Indian Railways
Urging all who have taken the path of violence for their political campaigns to shun it and return to the mainstream, prime minister Narendra Modi has said that weapons cannot achieve lasting peace. “On the solemn occasion of Republic day, I would appeal to anyone in any part of the co
As India gears up to celebrate its 71st Republic Day on January 26, it will host Brazilian president Jair Bolsonaro as the chief guest of the event that marks the day when the country formally adopted the Constitution as the guiding document. This will be Bolsonaro’s maiden visit, which he would like
With the outbreak of Coronavirus reported from China, India has started taking precautionary measures, and begun screening passengers of selected flights. “As of 21st January, a total of 43 flights and 9156 passengers have been screened for novel Coronavirus illness. Till now, no case
Every middle-class Indian dreams of a home coupled withlanded property to live off the rent. However, large initial investment, particularly inmetros, and low yields ensure that real estate is out of the reach of the common man. A return of 7-8 percent from commercial properties is considered highly commen
The Maharashtra State Election Commission has urged the residents to take advantage of the ongoing Electors Verification Programme (EVP) and register their names along with those of the members of their families in the electoral rolls. The drive, which started on November 11, 2019, will continue till Febru
The budget season is here, and the annual document has gone to print, beginning the lock-in period till its presentation in parliament on February 1. The Halwa ceremony, marking the commencement of the budget printing process, was held in North Block Monday morning in the presence of finance