New Delhi: With the aim of initiating reforms in its accounting system, the railways today launched a pilot project on accrual accounting and upgradation costing system.
“Final accounting is a most critical part. We want to put a proper system in place and started a pilot project,” Rail Minister Suresh Prabhu said after launching the pilot project on accounting reforms at Rail Coach Factory at Kapurthala.
The project aims to link outcome with expenditure and bench-marking of costing at the Kapurthala factory.
“What we did in railways today, will be replicated in all other departments in the government in future,” Prabhu said.
Established in 1986, the Kapurthala factory is one of the modern coach manufacturing units of the railways.
The system of accrual accounting is designed to improve the quality of reporting of the financials of the production unit significantly by ensuring compliance with the tenets of Generally Accepted Accounting Principles and Accounting pronouncements made by the Government Accounting Standards Advisory Board.
The new state-of-the-art costing system will be IT driven and use modern management accounting tools to identify areas for cost reduction. It will ensure optimal utilisation of scarce resources and also serve as a platform for tracking of expenditure.
Railways have already embarked on a pilot study on introduction of accrual accounting in a division, a workshop and the zonal headquarters of North Western Railway.