Finance and Budget

Government expenditure is divided into two parts-

1. Voted - made from consolidated fund of India 

2. Charged - Charged from consolidated fund of India. 

Article 113(1) - Charged Expenditure is not subjected to vote of parliament.

Article 113(2) of Constitution -  Voted expenditure

Abstract Estimate- For obtaining Administrative Approval 

Detailed Estimate- For obtaining Technical Sanction of competent authority.Cost should not exceed Abstract Estimate.Prepared in sufficient Detailed.Detailed Estimate is not required for work less than 5 Lakh.

Supplentary Estimate - An item of work, which is found later,should be considered as being a part of an estimate already prepared and sanctioned.

Revised Estimate- 

1. If the expenditure on a work likely to exceed the sanctioned cost.

2. Prepared and submitted for sanction of the competent Authority.

3. Prepared based on earnings/ expenditure trends of first five months and projections for the balance period.

For open Line Works-

a) Abstract Estimate 

b) Detailed Estimate 

c) Supplentary Estimate 

d) Revised Estimate 

For Construction of New Line Projects:-

a) Project Abstract Estimate 

b) Construction Estimate 

c) Completion Estimate 

Hierarchy of classification of Govt Expenditure 

Major head --- Sub Major head ---Minor Head --- Sub Head ---- Detailed head--- Primary Unit ( PU)

In the work segment Minor head is plan head.

Primary Units-

PU 1- Basic pay of officers/ employees 

PU 2 - DA

PU 3 - BONUS

PU 4 - HRA

PU 7 - Transport Allowance 

PU 8 - NPS CONTRIBUTION FROM GOVT

PU 10 - KILOMETER ALLOWANCE TO RUNNING STAFF

PU 11 - OVERTIME ALLOWANCE 

PU 12 - NIGHT DUTY ALLOWANCE 

PU 13 - OTHER ALLOWANCE 

PU 14 - FEE & HONORARIA

PU 15 - TRANSFER ALLOWANCE 

PU 16 - TRAVELING EXPENSES

PU 17 - AIR TRAVEL EXPENSES IN LIEU OF PASS

PU 18 - OFFICE EXPENSES 

PU 19 - RENTALS FOR P & T PHONES

PU 20 - LEAVE ENCASHMENT 

PU 21 - ADVERTISING EXPENSES 

PU 22 - UTILITIES INCLUDING WATR BILLS

PU 23 - RENTAL FOR OFFICE EQUIPMENT 

PU 24 - Printing & Stationary incl:

PU 25 - CEA ALLOWANCE 

PU 26 - Rembursement of Medical EXPENSES 

PU 27 - Stock Items through store

PU 28 - Non Stock item through Direct purchase 

PU 29 - Payment to Re engaged staff

PU 31 - Fuel Direct purchase 

PU 32 - Contractual Payment 

PU 39 - Air travel- Domestic 

PU 40 - Air travel- Foreign 

PU 42 - Arrears of pay

PU 43 - Arrears of DA and DR

PU 53 - All india LTC

Re appropriation Powers of Railway Board-

Not Allowed-

1. Revenue to Capital or capital to revenue within Grant

2. Voted to Charged or charged to Voted 

3. One source of Finance ( capital,RRSK etc) to Other source of fund ( capital,RRSK etc)

4. One Civil grant ( SBF,HBA,PC) to another civil grant.

5. One Major head to another Major head.

Allowed-

1. One Sub Major head to Another Sub Major Head.

2. One Plan Head to Another Plan head.

3. One source  to another within same plan head.

Re appropriation Powers of Zonal Railways 

Allowed-

1. Within Same primary Unit under same Sub Major Head.

2. From one itemized pink Book work  to  another itemized pink book work in Same plan Head.

3. From one work of Law book item to another work of Law Book.

Important points about Re appropriation Rules

1. Prior Finance Concurrence is required. 

2. Sanction order of Re appropriation should be generated from budget VPN to VeRBS- VPN enabled Rail Budget System through Re appropriation Module only.

Classes of Tender -

1) By advertisement ( open tender)

2) By direct invitation to limited numbers of firms (limited tender)

If it is not practical to to call open tender, limited tenders may be invited with concurrence of FA & CAO and approval of competent authority.

Limited tenders to be invited from Contractors borne on approved list.

3) Special Limited tender

Tenders need not to be born on approved list.

3) By invitation to one firm/contractor 

Direct Acceptance of tenders -Works

1) Constituiting the tender Committee is not required for awarding work upto 50 lakhs.

2) By SG or JAG or Sr.Scale Officers ( Independent charge)

3) Tendering through E tender and Open tender.

4) Minimum Notice Period- 21 days

5) Ensure availability of funds before calling open tender.

6) L1 can not be bypassed.

PVC ( Price variation Clause) 

1) Used to resolve conflict between Contractors and Railway due to variation in prices.

2) To protect the interest of Contractors as well as Railways against the rising and declining prices of components of the contract respectively.

3) Applicable for Contractors above 5 Cr.

Two Packet System-

1) The main object is to assess the tender technically without being influenced by the financial bids.

2) The tender will submit his offer in two sealed packets.

First packet - Technical and commercial offer

Second Packet  - Financial offer

Both sealed Packet should be kept and sealed in one envelope.

3) If the offer of first packet is acceptable by Competent authority, then only the second packet will be opened and tender will be finalized in Normal manner.

4) If first packet is not acceptable for the Tender committee, the second packet of such tender will be returned to party without open.

5) In two packet system, tenderer shall keep the offer open for a minimum period of 90 days.

6) Above 10 Cr , it is Mandatory.

Force Majeure Clause -

1) It means unforseen  circumstances that prevent someone from fulfilling a contract such as act of God,war, flood etc.

2) No LD ( liquidated damage) to the Contractor in this case.

3) The supplier shall notify the purchaser within 21 days for store contracts.

4) For Works contract,this period is 30 days.

5) Either party shall have option to terminate contract on expiry of 60 days for store contracts from commencement of such force Majeure without financial repurcation.

6) For Works contract,this period is 120 days.

 Demand Number-

Demand Number 7- Plant and Equipment 

Demand Number 11- Staff welfare and Amenities 

Demand Number 13 - Provident fund, pension and other Retirement benefits .

Demand Number 16 - Signal and telecom works 

Financial Eligibility Criteria -

The tenderer must have minimum average annual Contractual turnover of V/N.

Where V is value of Contract and N is Number of years prescribed for completion of work.

Plan head 65 - training/HRD

As per GCC Contractors Authorized Engineer shall be a graduate engineer with 3 years of experience.

Pink book - Cost more than  50 Crore. Sanctioned by Railway Board 

Law book- Cost less than 50 Crores. Sanctioned by GM.