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Para No. 4.4.1 Annexure: 4-A10

Revenue and Works Expenditure
(Extract of Chapter V of Indian Railways Financial Code)

(1) Revenue and Works Expenditure: As all Railway expenditure, other than that 'charged'
on the Consolidated Fund of India, is voted in the form of the Demands for Grants, the
budgetary control is intended to ensure that expenditure is incurred for the purposes,
and within the limits, as voted by Parliament. (Para 504)

(2) The exercise of authority for incurrence of expenditure carries with it also the
responsibility for control of expenditure within the authorised limits. Further, these
powers are subject to provisions contained in the various Codes, rules and regulations
and also observance of the standards of financial propriety. (Para 505)

(3) Standards of financial propriety: In the exercise of their financial powers, the sanctioning
authorities must pay due regard to the following principles: (Para 116)

(i) The expenditure should not prima facie be more than the occasion demands, and that
every Government servant should exercise the same vigilance in respect of expenditure
incurred from public moneys as a person of ordinary prudence would exercise in
respect of the expenditure of his own money.

(ii) No authority should exercise its powers of sanctioning expenditure to pass an order
which will be directly or indirectly to its own advantage.

(iii) Public moneys should not be utilised for the benefit of a particular person or section
of the community unless
(a) the amount of expenditure involved is insignificant; or

(b) a claim for the amount could be enforced in a court of law; or
(c) the expenditure is in pursuance of a recognised policy or custom.

(iv) The amount of allowances, such as travelling allowances, granted to meet expenditure
of a particular type, should be so regulated that the allowances are not on the whole
sources of profit to the recipients.

(4) Revenue Expenditure: The revised and budget estimates of ordinary working expenses
submitted by the General Manager to the Railway Board are based on detailed
estimates of revenue expenditure obtained by him from the various heads of
departments of the railway. On receipt of the allotment from the Railway Board, these
detailed estimates may require modification consistent with the allotment sanctioned by
the Railway Board or as may be deemed necessary by the General Manager. (Para 506)

(5) Within the amounts of the allotments fixed by General Manager for the various spending
authorities in charge of divisions and departments, such authorities have full power to
sanction expenditure on revenue account during the year, subject to the condition that
the specific sanction of the competent authority must be obtained separately to all
items of expenditure on establishment and experimental or special temporary works
where under rules or orders such sanction is necessary; in a case in which the General
Manager has prescribed that detailed estimates should be prepared and administrative
approval and technical sanction obtained before the incurrence of expenditure, the
procedure laid down by the General Manager must be followed. (Para 508)

Chapter 4 Budget Estimates, Expenditure, Budget Control and Completion Reports Page 78 of 535