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Parliamentary panel unhappy at railways spending in excess of budget grants

 Unhappy to note that the railways was ending up spending more than what is earmarked for it in its budgetary allocations, a parliamentary panel has asked the public transporter to review its internal mechanisms to check the recurring phenomenon.

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 Unhappy to note that the railways was ending up spending more than what is earmarked for it in its budgetary allocations, a parliamentary panel has asked the public transporter to review its internal mechanisms to check the recurring phenomenon.

The Public Accounts Committee (PAC) headed by Congress MP KV Thomas, in its latest report presented today in Parliament, observed that the excess expenditure in 2010-11 reached a huge sum of Rs 3,056.86 crore as it rose from Rs 1,922.84 crore in 2009-10 after being calculated as Rs 532.12 crore during 2008-09. Such expenditure as is incurred in excess of sanctioned estimates is treated as unsanctioned expenditure, it said.

The 22-member PAC noted that despite the directions from rail ministry to the zonal units for undertaking a realistic assessment of their expenditure, 248 instances of the actual expenditure incurred by the zones exceeding their allotment have come to light while there were 139 cases of savings. The panel has, therefore, asked railways to strengthen the system of documentation that aids the drawing up of budget estimates. It also called for the verification of the authenticity of the data which is used for projecting budget estimates, particularly at zonal levels.

Also Read: Railways in existential crisis but no stock market route: Suresh Prabhu

It suggested that repeated lapses may be brought to the notice of the rail and finance ministry that exemplary action may be taken against the CAO and the financial adviser concerned. The committee also noted that the funds allocated were not being optimally utilised, thus defeating the objective behind the exercise.

It said it was surprised to find that despite the availability of the latest IT tools for collecting and analysing data, railways is not able to properly assess its budgetary requirements. The financial position of railways did not improve despite excess expenditure of more than Rs 1,000 crore as was evident from the negligible negative balances with which the railways depreciation reserve fund, pension fund, development fund and capital fund closed in 2011-12, it said, adding that instances of misclassification of expenditure occurred regularly in the accounting system.

The committee recommended that railways review its internal control mechanisms and strengthen the same if need be for ensuring compliance with the rules and regulations which have been laid down for effective budgeting and proper fiscal reporting, particularly at zonal levels. It also said that responsibility and accountability at each level needs to be clearly defined and properly followed.
 

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