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Preface Introduction
Chapters Concordance
List of Alphabetical
Standard Index of
Forms terms/expressions
Correction
Slips
Errata
FAQ
(Frequently
Asked
Questions
Section)
 PREFACE
(First Reprint)
This edition is a reprint of the Indian Railway Finance Code, Volume 1, 1982 edition, incorporating additions
and alterations introduced through Correction Slips issued up to number 16, dated 30th May 1991.

(MASI HUZZAMAN)
New Delhi Secretary,
Railway
Board.
12.06.1991
*****

PREFACE
Problems of Railway Financial Management and the techniques developed in tackling these have become
complex and varied over the years. The Code Revision Cell set up in 1973 in pursuance to the
recommendations of the Railway Convention Committee, 1971 has, therefore, rightly considered the need for
a separate Railway Financial Code to serve as a compendium of general rules and orders on financial matters
including compilation of annual budget.
2. THE INDIAN RAILWAY FINANCIAL CODE includes revised version of a part of the erstwhile Indian
Railway General Code, which has now been rewritten in two separate texts of which this book is the second
text, the first being the introductory text published separately under the title THE INDIAN RAILWAY
ADMINISTRATION AND FINANCE-AN INTRODUCTION.
3. The Indian Railway General Code was first issued as a 'provisional issue' on 5th September, 1938 ; it was
up-dated and re-printed on 5th January, 1942 as the first edition, the appendices embodied in the 'provisional
issue' being printed for the first time in a separate volume. A re-print was issued in April 1950 and a second
re-print in May 1952. A revised edition of the Code, incorporating changes consequent on promulgation of the
Constitution, and those arising out of the 1949 Railway Convention, was issued on September 14, 1954. The
first re-print of this revised edition was issued five years later, and the second re-print issued on August 22,
1970 has been the edition in use before the present revision of the Code.
4. The book as compiled deals with various important aspects of financial management like Project Appraisal,
Budget Formulation, Reporting and Contro1, Parliamentary Financial Control, Award of Contract, Allocation
of Expenditure, 'Rules relating to Inter-Railway and Inter Departmental services, Contingent Expenses,
Investigation of Losses, etc. A Chapter on the procedure dealing with Audit-Report presented by the
Comptroller and Auditor General of India and its consideration by Public Accounts Committee of Parliament
has been added, deleting Chapter VIII 'Communications from Audit and action thereon' from the existing
Accounts Code. The existing Chapter XI on ‘Incidence of the Cost of Works for non-Railway
Departments/Ministries' has been transferred to the Engineering/ Mechanical Code, Chapter XIV on 'Cash,

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 Preface

Cheques and Vouchers', excluding the section regarding 'Cash Imprests' has been transferred to the Accounts
Code and Chapter XVI on 'Bills for Pay and Allowances' has been transferred to the Establishment manual.
The miscellaneous matters dealt with in Chapter XX, excepting the section regarding 'Annual Reports of
Railways', have not been incorporated in this Code nor in any other Code or Manual issued by the Board.
These should be included in the Manuals of 0ffice Procedure of the Zonal Railways., Production Units, etc.
The Appendices which were printed in a separate volume of the General Code have now been embodied in the
Financial Code, vol. I, except Appendices relating to the classification of expenditure and earnings which have
been embodied in Volume II of this Code.
5. Based on the recommendations of a Task Force constituted in 1973 (in pursuance of the recommendations
of the Railway Convention Committee 1971) and as accepted by the Government, restructured Demands for,
Grants and Revised Classification of Revenue and Capital Expenditure have been introduced with effect from
1st April, 1979. The provisions contained in this Code reflect the revised System.
6. This Code supersedes all existing rules and orders issued by the Railway Board on the subjects dealt within
it. Unless contrary intention is expressed or implied in the wording of the Code rules, provisions of this Code
are mandatory and binding on all Indian Railways. For deviations from the mandatory rules, sanction of
Railway Ministry should be obtained. In accordance with the Government's policy, this Code is being issued
as a diglot edition.
7. The Railway Board will be glad to consider any criticism and suggestions from the Railway
Administrations. Any errors or omissions which may be found in this edition may also be brought to the notice
of the Secretary, Railway Board.
NEW DELHI Himmat Singh
8th April 1981 Secretary, Railway Board.

INTRODUCTORY NOTES
1. Index letters for Codes.-The following Index letters are used for distinguishing the several Indian Railway
Codes from each other :-
A- Accounts Department.
E- Engineering Department.
F- Financial Code.
G- Administration and Finance-an Introduction.
R- Establishment Code.
S- Stores Code.
T- Traffic Department (Commercial).
M- Mechanical Department (Workshops).
2. Paragraph Numbers.-For convenience of indexing and of reference, the paragraphs have been numbered
according to a 3/4-figure "Code", in which the last two figures give the number of the paragraph and the

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remaining figures the number of the Chapter. Thus paragraph 101 of any code is paragraph I of Chapter I of
that code and paragraph 1421, paragraph 21 of Chapter XIV.
3. Reference to paragraphs.-Reference to the paragraphs of a code is made by putting the paragraph number,
suffixed by the index letter of the code concerned. Thus 1335-RI means paragraph 35 of Chapter XIII of the
Indian Railway Establishment Code Volume I and 5 Appendix VIII-RI means paragraph 5 of Appendix VIII
of the Indian Railway Establishment Code Volume I.
4. Reference to "Forms".-The "forms" referred to in any of the Indian Railway Codes (except the
Establishment Code) take the number of the paragraph of the code in which they are described, the index
letter, of the code in question being prefixed to the number of the paragraph in which the form is illustrated.
Thus W-703 is the form that is described and illustrated in paragraph 3 of Chapter VII of the Indian Railway
Code for the Mechanical Department (Workshops).
5. Correction Slips.-The correction slips will be printed on one side and issued in separate series for each
code so, that these may be cut and pasted against the relevant rules.
6. Index to Correction Slips.-To facilitate reference to correction slips that have been issued to the Codes, an
up-to-date index of correction slips is published from time to time showing for each Code the paragraph or
rule numbers affected by correction slips and the numbers of such correction slips. This index may be pasted
inside the cover of each Code.

*****

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Are You suprised ?

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P R B - 243/ Reprint

3,000-1991(DSK III)

GOVERNMENT OF INDIA

MINISTRY OF RAILWAYS

(RAILWAY BOARD)

INDIAN RAILWAY FINANCIAL CODE

Volume I

(FIRST REPRINT – 1991)

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 covering

(Embodying Correction Slips upto No. 53 dated 05.11.99)

Price Inland : Rs. 126

Foreign : £ 4.09 $ 2.61
As on Date : 14-5-93

INDIAN RAILWAY FINANCIAL CODE

VOLUME I
(FIRST REPRINT-1991)

(Embodying Correction Slips upto No. 52 dated 06th August 1998)

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covering

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 concordance

CONCORDANCE

Concordance showing the paragraphs in this book and the corresponding Paragraphs in the Indian
Railway General Code Vol. I (Revised Edition-Second Reprint, 1970) or other authorities on which each
para is based.

· CHAPTER I

· CHAPTER II

· CHAPTER III

· CHAPTER IV

· CHAPTER V

· CHAPTER VI

· CHAPTER VII

· CHAPTER VIII

· CHAPTER IX

· CHAPTER X

· CHAPTER XI

Note :-The subjects dealt with in the following chapters of the Indian Railway General Code Volume 1,
not dealt with in the Financial Code have been / are to be dealt with in the Codes/Manuals shown against
each.
Chapter I to III, XV, XVII Indian Railway-Administration and Finance - An Introduction.
& XIX
Chapter XI Indian Railway Code for the Engineering/Mechanical Department
(Workshop).
Chapter XIV (excluding Indian Railway code for the Accounts Department.
Para 1410 to 1415)
Chapter XVI Indian Railway Establishment Manual.
Chapter XX (excluding The manual of office procedure of the Zonal Railway production Units etc.
para 2060 to 2066 )

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concordance

ERRATA
INDIAN RAILWAY FINANCIAL CODE-VOL. 1
(First Reprint- 1991)
Page Para/Line Read For
2 Chapter 1, Para 104, Stage IV Peninsular Peniusular

20 Chapter II, last line of note below para 249 Paragraph 248 Paragraph 250
50 Chapter II, Annexure ‘ C’ Table 18, Single payment Single Paymefitent
heading
57 In heading of Example (1) remodelling and re-modelling and
provision proviston.
61 Chapter II Annexure 'E' Example (3), Item 0.40 40
2(b)
62 Chapter II Annexure 'E' Example (3), item 16,000 1,60,000
5
62 Chapter II Annexure 'E' Example (3), Item 2,93,450 3,68,614
7 bellow ‘decrease ‘.
72 Chapter II Annexure ' G ' Item I (V) (20,000 X 0.0221) (20,000 X 0.221)

75 Chapter II Annexure 'H' Item 2, Delete the cross mark before the figures in
illustration, last but one line. l,03,000 the equation
82 Chapter III Para 324, Demand No. 13 insert , (coma sign) after the words Provident
Fund.
82 Chapter III Para 324, Demand No. 14 Funds Fund
85 Chapter III Para 335, item (XIV) Ist line Estimates Estimate

85 Chapter III Para 335, item (XV) ‘’Miscellaneous "Miscellaneous Receipt".

Receipts’’
88 Chapter III Para 347, against Code Dismantled Dismentaled
No. 13
100 Chapter III Annexure II, Item 65, last line Fund und
131 Chapter IV Annexure III, in 2nd line after Companies Comapnies
Grand Total on Liabilities side.

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concordance

152 Chapter IV Annexure XVII Annexure ' B', Add the words ‘Withdrawn’ between ‘those’ and
in heading of 3rd column of Form No. F ‘during’.
433(7)
190 Chapter VI Para 610, in the Ist line Delete the last words ' for ' of the line.
211 In the formula given in Para 782 (b) Cost of periodical Cost of peridoical over-
over- haul. haul.
236 Chapter X Para 1005 (III) in 6th line of the Cold Coid
note.

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 ALPHABETICAL I N D E X

ALPHABETICAL I N D E X

A to C

D to L

M to Z

ALPHABETICAL I N D E X - A to C

Item Paragraph
Abandoned Works—
See "Allocation of Expenditure".
Accident Compensation, Safety and Passenger Amenities Fund-
Appropriation from- 714
Appropriation to- 715
Accounts-
Disagreement between - and Audit 920
Rectification of mistakes in- 922
Separation of from Audit 909
Agreements-
Basic Principles to be kept in view for executing- 621
Details of documents forming part of- 625
Allocation of Expenditure-
Abandoned works on Indian Railways 704 (1)
Abandoned works on private railways worked by the Government 788 (c)
Additional Plant and Machinery not connected with any specific work 703 (6)
Additions to the line and equipment of the line 703 (4)
Application of detailed rules of Private railways worked.by the Government 788
Assets other than rolling stock transferred from one Railway to another 781
Assets transferred from open line to construction. 783
Ballast 731 & 739
Calculating Machines 737
Ceremonial Occasions 775
First construction and equipment of the line 703 (2)
General Principles governing-on Indian Railways 701-702
General Principles governing-on Private railways worked by the Government 788

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 ALPHABETICAL I N D E X

Grouping of works for purpose of- 713

Incidental charges 774
Incidental works 772-773
Labour charges on assets transferred for use on a new work 704 (4) & 705 (4)
Labour Welfare works 711(3)
Land 703(1), 717-723
Lines partially opened for traffic 733
Maintenance of lines not opened for traffic 703(3)
Maintenance of lines opened for traffic 705(1)
Maintenance of quarters built as part of important open line works 741

New Lines, after the date of opening 725, 733

New Minor Works on Indian Railway 707(1), 734, 736

New Minor Works on private railways worked by the Government 788(a)
Passenger amenities 711 (1)
Renewal of wagons 766-767
Renewal of Rails and Sleepers 759-760
Renewals of rolling stock parts 768-771
Replaced stock kept running on the line 784-786
Replacements and Renewals 709(1), 753-758
Replacement of boilers 761-763
Replacement of Carriages and brake-vans 764
Replacement of steam coaches by engines 765
Replacement and Renewals of other Assets 703 (6), 705(3)

707(3), 709(1)
Revenue sidings 738
Rolling stock additions 742-748
Rolling stock transferred from one Railway to another 777-780.
Spare Parts of rolling stock and machinery- 750-752
Special posts created for the supervision or construction of a work 703(7), 709(6),

711 (5), 776

Stand-bys 749
Surveys 724
Temporary and experimental works 740
Tools and plant specially purchased for a work 703(7), 709(6),

711 (5), 776

Unremunerative operating improvement works 707 (2), 711 (4)
Allotment (s)-
Definition of- 361
Sanctioned by General Managers 365
Sanctioned by Railway board 361
Appropriation(s)-

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 ALPHABETICAL I N D E X

From the consolidated fund of India 360

Statement to accompany appropriation accounts of Grant No. 14- 458
Appropriation to Funds.
Appropriation Accounts-
Certificate on- 442,460
Consolidated-of Civil Grants by the Railway Board 462--463
Consolidated-of Indian Railways by the Railway Board 455-457
Date of submission of-by individual Railways 403
Depreciation Reserve Fund-regarding 457 (iii)
Examination of-by the Public Accounts Committee 465-466
Exhibition of recoveries or credits 418
Explanation of Effect of closing down of offices 420
Explanations of losses 424-425
Explanations of purchase and disposal of immovable property 421
Explanations of reappropriations 416
Explanations of savings due to postponement of Expenditure 417
Explanations of unadjusted Liabilities 419
Explanations of variations 409-415, 422,457 (ii)
Explanations of variations in the-of civil grants 452-454
Figures to be exhibited in- 408
Forms of-for interest bearing Loans and Advances 450
General instructions for the preparation of- 409-423
Main contents of consolidated-of Railways in India 457
Manner in which the form of-should be filled 404-407
Method of exhibiting Losses in- 424-425
Reconciliation of-with the combined Finance and Revenue Accounts 459
Review of- 464
Submission of Advance copy of consolidated-to Audit 403
Subsidiary statements to accompany-
Balance sheet of railways 427
Block Accounts 427
Capital statement (Comprising Loan Account) 427, 457(xiv)
Depreciation Reserve Fund for Indian Railways 433(1), 457(iii)
Profit and Loss Account 427, 457(xiv)
Review of Works Programme 435
Statement of credits to Capital for retired assets 436
Statement of Development Fund 457 (111)
Statement of estimates provisionally accepted by Statutory Audit 447
Statement of Expenditure on Strategic Lines 433(10), 457(xii)
Statement of irregular reappropriations 433(13), 457 (xvi)
Statement of Misclassifications 433(14), 457 (xvi)
Statement of open line works 433(9), 457 (xi)
Statement of remissions and Abandonment of claims to revenue 433(8), 457 (x)
Statement of stores transactions 433(5), 457 (iv)
Statement of undercharges detected 433(7), 457 ix)
Statement of unsanctioned expenditure 442, 445, 457 (viii)
Statement showing outstanding under suspense balances 433(5),457 (vii)

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 ALPHABETICAL I N D E X

Statement showing percentage of ordinary working Expenses to Earnings 434

Stock Verification and revaluation Statement 439, 457 (iv)
Stores Accounts 437
Summary of Accounts 440, 457 (i)
Approximate Receipts and Expenditure-
Statement of-to be submitted to Railway board 511
Statement of receipts to he submitted by the Railway to the Railway Board 503
Army in India Reserve of officers-
Incidence of Pay and Allowances of Railway servants who belong to the- 807-812
Assets-
Adjustment of the cost of transferred from open line to construction 783
Credits realized from the disposal of- 710 (2)
Inter-Railway transfer of- 781
Method of financial justification to be adopted when- are scrapped, 239,240
condemned or abandoned
Norma; lives of -for the purpose of annual slinking fund payment 219
Audit -
Action to be taken by Accounts Officers on defects or irregularities 917
brought to notice by-
Action to be taken on Notes and Inspection Reports of-- 918
Certification on appropriation Accounts by ADAI (Rlys) 461
Communications from- 916
Disagreement between the Accounts Officers and Officer 920
Replies to-inspection reports 919
Separation of Accounts from- 909
Balance sheet- Annexure III to
Form of-Indian Railways Chapter IV.
Ballast- 731 & 739
Allocation of expenditure on-
Block Account-
Form in which to be prepared 429
Formulae for determining cost of-improvement for-
Renewals of Rails, cranes, weighing machines and Weigh bridge
Renewals of girders
Renewals of Locomotives
Renewals of Tenders
Renewals of Boilers Annexure I to
Renewals of Carriages and Brake-vans Chapter IV
Renewals of Wagons
Renewals of Rolling-Stock Parts
Renewals of Machinery
Subsidiary statement to Appropriation Accounts 427

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 ALPHABETICAL I N D E X

Boilers- 761-763
Allocation of the cost of replacement of-
Branch Line- 244-247
Post-Project appraisal to be applied to new-
Budget-
Definition of 301, 359
Method of working out proportionate-allotment for 508-510
each month for the purpose of financial control
Preparation of annual- 307,354-356
Presentation of –to Parliament 301, 359
Responsibility for framing- 309-311
Submission of-to Minister 357-358
Calculating Machines— 737
Allocation of expenditure on-
Capital-
Charges-to-- on Indian Government Railways 703
Credits to -on Indian Government Railways 704
Statement of Credits to-for retired assess 436
Capital Statement- Annexure II
Form of- to accompany appropriation Accounts to Chapter IV
Carriages and Brake-vans- 764
Allocation of the cost of replacement of-
Central Government-
Limitations on Powers of-to incur expenditure in Railway matters 504
Powers delegated by the-in financial matters to 505
authorities subordinate to them
Ceremonial occasions- 775
Allocation of expenditure on-
Certificate (s)- 460
On Appropriation Accounts by Financial Commissioner for Railways and Chairman,
Railway Board -
Charged Expenditure- 303
Classification of-
Chittaranjan Locomotive Works and other production units 432
Accounts of-
Civil Grants-
Appropriation Accounts of-to be submitted by Railways. 449-451
Consolidated appropriation Accounts of-to be prepared. by the Railway Board 462,463
Explanations for variations in the appropriation accounts of - 452-454
Revised and Budget estimates of -and their due dates 307
Coal, Diesel and Electricity-Statement of Quantity and cost of- 333
Committee- Constitution of tender- 614 -616

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 ALPHABETICAL I N D E X

Condition(s)-
Approval for unusual -to be obtained from higher authority 627
-of contract to be embodied in all contracts 626
variation of contract
305
Consolidated fund of India -
Procedure for withdrawals from the-
Contingency Fund of India- 382
Advances from
Contingent charges-
Authorities empowered to sanction- 1010,1040-1043
Bills for- 1044
Classification of- 1004, 1005
Condition under which Postal charges can be admitted as ordinary- 1011
Control over- 1048-1049
Duties of the Drawing Officers in regard to- 1046
Exceptional items which may be treated as- 1003
Nature of- 1001,1002
Pay, Additions to Pay and compensatory allowances 1003
not to be charged as-
Register of- 1048
Rules regarding submission of vouchers for- 1045
Un-usual items of-not to be incurred without previous 1009
sanction of superior authority
Contract (s)-
Basic principles for executing- 621
Competency of the authorities to execute 601
Conditions of- 626
Details of documents forming part of- 625
Execution of-Prior to commencement of works or supplies 622
Limitation to execute- 623
Controlling Authorities-
List of-for budget purposes 307
Responsibility of – to avoid excess over grants. 369-372
Control over Expenditure
Against Capital Suspense Grant 534-538
Against detailed estimates 519
Chargeable to Working expenses 506-518
During the last quarter of the year 559
Financial Review for- 513,525,526,539
On works 520-533
Responsibility for- 504, 505

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 ALPHABETICAL I N D E X

Court attendance--
Incidence of travelling allowance of a railway servant 8 23
for -to give evidence in official capacity
Conveyance charges- Rules for payment of conveyance hire 1008
Credits- 706,708,710 (2).
Allocation of - for released material 712 (3),715 (2)
List of anticipated-excluded from scope of grants to accompany revised and budget estimates 335
--Or recoveries should be taken in reduction of demands 335
Statement of--to Capital for retired assets to accompany Appropriation Accounts 436
-To be shown at the end of the Appropriation Accounts of each grant 418

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