As a part of its concerted effort to introduce the major initiative of ‘Accounting Reforms’ in Indian Railways as per the 2015-16 Rail Budget announcement of the Railway Minister Shri Suresh Prabhakar Prabhu, several Workshops and seminars are being planned and organised. Continuing with such efforts another important Workshop, to share global experience, was held here on 07-10-2015 by the World Bank on “Accounting for Accountability”. It was organised in collaboration with Ministry of Railways. The Workshop was chaired by Minister of Railways Shri Suresh Prabhu and was attended by senior officials of the Railway Board, Zonal Railways, Railway PSUs and participants from the ICAI and the World Bank. A delegation of speakers, from various countries like New Zealand, Australia, Poland and USA, with expertise in railway operations, participated in the workshop and made presentations addressing operational and financial aspects of rail operations for small, mid size and large railway networks.
The workshop is part of concerted efforts to implement the major initiative of Indian Railways on introducing Accounting Reforms as announced in 2015-16 Railway Budget
The Minister of Railways Shri Suresh Prabhu while addressing the Workshop emphasised that the project initiated by Indian Railways for introducing Accounting Reforms assumes greater relevance today considering the fact that Indian Railways is embarking on huge investments in infrastructure both from government and institutional finance. The resources thus would need to be used in the most diligent manner. In this context he stressed the need for a system approach in developing an integrated IT enabled accounting architecture with a clear focus on measurement of outputs and outcomes of operational activities while formulating the budget. The Minister also emphasised the need to focus on the determination of cost of services with an aim to determine a rational pricing structure for the Railways. The proposed accounting framework would provide greater transparency and promote good governance, he said.
The other speakers at the workshop shared their experience of transforming their respective accounting systems to serve management need for activity based unit costing and outcome budgeting for informed decision making for efficient operations and cost controls
Minister of Railways, in the budget speech of 2015-16, had announced the formation of a Working Group to modify the present accounting system of Indian Railways to enable tracking of expenditure to desired outcomes and online availability of costing data in key performance areas like operation, construction, capacity augmentation, maintenance and post asset commissioning evaluation.
In order to give effect to the budget announcement, Indian Railways has engaged the Institute of Chartered Accountants of India in developing a design for implementing an integrated Outcome Budgeting and Performance Costing System. An Advisory Body consisting of domain experts and a multi disciplinary Working Group of Railways has been constituted to assist the ICAI in designing a detailed framework of proposed accounting system as envisaged in the budget announcement.
In addition, IR is also conducting a pilot study on introduction of Accrual Accounting at Ajmer Division and Ajmer group of Workshops with the assistance of the Accounting Research Foundation of the Institute of Chartered Accountants of India.