Railway Accounts
Railway Accounts
Key Information
| Item | Details |
|---|---|
| 1. Financial year of Indian Railways | 1 April – 31 March |
| 2. Budget presentation in Parliament | By the Union Railway Minister (now merged with Union Budget) |
| 3. Accounts compilation agency | Comptroller & Auditor General of India (CAG) |
| 4. Railway’s accounting system | Accrual-based Double-entry system |
| 5. Fund for Pension disbursement | Railway Pension Fund (managed by MoFinance) |
| 6. Major revenue head | Transportation Earnings (Goods + Passenger) |
| 7. Accounting code for freight earnings | 3001-3999 series |
| 8. Accounting code for passenger earnings | 1001-1999 series |
| 9. Depreciation fund for track & bridges | Depreciation Reserve Fund (DRF) |
| 10. Capital fund for safety works | Rashtriya Rail Sanraksha Kosh (RRSK) – ₹20,000 cr annual corpus |
| 11. Internal resource generation target | 14-16 % of annual Capital Outlay |
| 12. Operating Ratio (OR) target (2025-26 BE) | ≤ 90 % |
| 13. Highest revenue earning zone | Central Railway |
| 14. Earnings unit in accounts | One Unit = ₹ 1,000 |
| 15. Wagon Registration fee credited to | Other Miscellaneous Receipts (OMR) |
| 16. Dividend payable to | Consolidated Fund of India (abolished 2016-17) |
| 17. Railway’s own finance wing | Indian Railway Finance Service (IRFS) |
| 18. Costing unit for passenger fare | Passenger Kilometre (PKM) |
| 19. Costing unit for freight | Net Tonne Kilometre (NTKM) |
| 20. Digital payment aggregator for IRCTC | Paytm, Razorpay & SBI e-Pay |
Important Points
- Operating Ratio below 90 % is considered healthy for Railways.
- Railway Budget was merged with Union Budget in 2017-18; separate Budget speech discontinued.
- Rashtriya Rail Sanraksha Kosh (RRSK) is non-lapsable and exclusively for critical safety works.
- Capital expenditure is met through Gross Budgetary Support (GBS), Internal Resources and Extra-Budgetary Resources (IRFC bonds).
- Indian Railways does not allocate budget for Dividend anymore; practice stopped after 2016-17.
- All earnings are credited to the Consolidated Fund of India and refunds are charged to the same fund.
- Zero-based budgeting is adopted for Plan Heads 4000-4999 (works expenditure).
- Accounting classification has 4 tiers – Major Head, Minor Head, Detailed Head and Object Head.
- Freight Earnings are further sub-divided into Coal, Cement, Food-grains, Container etc.
- Passenger Earnings are classified into Reserved, Unreserved, Suburban and Surcharge.
- Outstanding dues of Railways are reflected under “Railway Receivables” in Finance Accounts.
- E-rolls and PFMS (Public Financial Management System) are mandatory for all railway payments above ₹ 1 lakh.
Practice MCQs
Question:01 Which fund is created exclusively for Railway safety works?
A) Depreciation Reserve Fund
B) Railway Pension Fund
C) Rashtriya Rail Sanraksha Kosh
D) Development Fund
Show Answer
Correct Answer: C
Explanation: Rashtriya Rail Sanraksha Kosh (RRSK) is a dedicated non-lapsable fund set up in 2017-18 exclusively to finance critical safety works on Indian Railways.
Question:02 In which financial year was the separate Railway Budget merged with the Union Budget?
A) 2014-15
B) 2016-17
C) 2017-18
D) 2018-19
Show Answer
Correct Answer: C
Explanation: The Government of India discontinued the 92-year-old practice of a separate Railway Budget and merged it with the Union Budget starting from the financial year 2017-18.
Question:03 What is the accounting system followed by Indian Railways?
A) Cash-based single entry
B) Accrual-based double entry
C) Hybrid cash-cum-accrual
D) Government single entry
Show Answer
Correct Answer: B
Explanation: Indian Railways follows the accrual-based double-entry accounting system as mandated by the Ministry of Railways, ensuring comprehensive recording of all financial transactions with matching debits and credits.
Question:04 The Operating Ratio of Indian Railways is expressed as—
A) Revenue over Expenditure × 100
B) Expenditure over Revenue × 100
C) Net Revenue over Capital Outlay
D) Gross Traffic Receipts over Total Working Expenses
Show Answer
Correct Answer: B
Explanation: Operating Ratio = (Total Working Expenses ÷ Gross Traffic Receipts) × 100, i.e., Expenditure over Revenue × 100. A lower ratio indicates better financial health.
Question:05 Which of the following is the highest revenue-earning zone of Indian Railways?
A) Northern Railway
B) Western Railway
C) Central Railway
D) South Eastern Railway
Show Answer
Correct Answer: C
Explanation: Central Railway consistently tops Indian Railways’ earnings chart due to dense passenger traffic, high-frequency suburban services, and heavy freight movement on key routes like Mumbai–Pune and Mumbai–Nagpur.
Question:06 Freight earnings are accounted under which accounting code series?
A) 1001-1999
B) 2001-2999
C) 3001-3999
D) 4001-4999
Show Answer
Correct Answer: C
Explanation: In Indian Railways, the accounting code series 3001-3999 is specifically reserved for freight earnings.
Question:07 Who compiles the Finance & Appropriation Accounts of the Railways?
A) Railway Board
B) Ministry of Finance
C) CAG of India
D) NITI Aayog
Show Answer
Correct Answer: C
Explanation: The Comptroller & Auditor General (CAG) of India is constitutionally mandated to compile and audit the Finance & Appropriation Accounts of the Indian Railways.
Question:08 Dividend payment by Railways to GOI was discontinued from the FY—
A) 2014-15
B) 2015-16
C) 2016-17
D) 2018-19
Show Answer
Correct Answer: C
Explanation: The Indian Railways stopped paying dividend to the Government of India from the financial year 2016-17 onwards.
Question:09 The unit for freight costing is—
A) PKM
B) GTKM
C) NTKM
D) RKM
Show Answer
Correct Answer: C
Explanation: NTKM (Net Tonne Kilometre) is the standard unit used for freight costing in Indian Railways, representing the movement of one tonne of revenue-earning weight over one kilometre.
Question:10 Outstanding dues recoverable from customers are shown in accounts as—
A) Railway Payables
B) Railway Receivables
C) Sundry Creditors
D) Contingent Liability
Show Answer
Correct Answer: B
Explanation: Amounts owed to the railway by its customers are classified as Railway Receivables, a current asset on the balance sheet.
BETA
