ESTIMATES Mrs.Nirupma Kumar Prof. Fin & Investment

ESTIMATES Abstract Estimate Detailed Estimate Revised Estimate Completion Estimate

Abstract Estimates Prepared to give administrative approval to the expenditure contemplated to form a reasonable idea of the rough expenditure General desirability of the work Should contain brief report and justification as well as specification, cost divided under main heads and sub-heads of specific items Allocation of expenditure – Expenditure should also be indicated

Detailed Estimate On receipt of administrative approval, detailed estimate is prepared for technical sanction of the competent authority No work in the Abstract Estimate should be commenced till the detailed estimate is sanctioned and funds allotted

Revised Estimate When it becomes apparent that expenditure is likely to exceed the amount provided in the detailed estimate, Revised Estimate should be prepared and sanctioned by Competent Authority Should be accompanied by comparative statement, showing the excess of savings under each sub-head

Completion Estimate It is a stock taking estimate and normally should be made at the end of one of the first three financial half years after the date of opening. It should include the following: (i) Amount of sanctioned estimate; (ii) Actual expenditure on all works upto the date of the construction estimate, (iii) Commitments on that date; (iv) Anticipated further outlay; (v) Total estimated cost; and (vi) Difference between the sanctioned estimate and the estimated cost.

Preparation of Estimates Quantities and rates are realistic and reasonable Proper distribution between cash and stores Allocation of each item is given and Plan Head is shown in the Estimate Incidental expenditures have been provided In case of renewal, replacement or dismantlement, credit for released material is provided for.

Check of Estimate Main points are – Expenditure proposed to be charged to railway funds is properly and legitimately chargeable Proper financial justification Existence of budget Competency of sanction

Estimates The following works do not require preparation of estimates: (i) For the construction or purchase of new work or asset under the category of new minor works if estimated to cost up to Rs.5,000; (ii) For renewals and replacement of existing works and assets chargeable to Open Line Works Revenue as a new minor work if estimated to cost up to Rs.10,000;

(iii) For renewals and replacements of assets charged to Development Fund and Depreciation Reserve Fund if estimated to cost up to RS.10,000; (iv) For renewals and replacements of assets charged to Revenue if estimated to cost up to Rs.50,000 and (v) For repairs and reconditioning of existing assets if estimated to cost up to Rs.50,000. Estimates

Estimates over 2 crores and upto 10 crores (or Rs.15 crores) if on basis of survey report require personal sanction of GM Works costing Rs.1 lakh and above should be included in the Works Programme only after obtaining Rly. Board’s prior approval Finance concurrence is necessary

Estimates of Deposit Works To execute works for and at the cost of other Government departments, local bodies, private persons & c To meet the cost of plans and estimates of such works as also those to be carried out for other Departments out of railway funds, which are subsequently not carried out, charges shall be levied on the total of the estimate inclusive of departmental charges.

Estimates of Deposit Works Acceptance of the govt. departments or the payment in cash by the local bodies or private individual concerned should be obtained In preparing estimates of works for other departments, local bodies, private individuals & c (i) Railway freight and carriage charges of materials proposed to be used in the works are provided for at rates applicable to the public and not at the concessional rates applicable to railway material (ii) Departmental charges at the proposed rates

Estimates of Deposit Works No work asked for by another government department should be commenced till a detailed estimate for the same has been accepted by the department concerned and sanctioned by the competent railway authority The amounts so deposited should be credited to the head “Deposits – Miscellaneous”.

General Rules Applicable to all Estimates Design and Execution - The designs of all new works and alterations to existing works should, as a rule, conform to the “Schedules of Dimensions”. The rates of various descriptions of work should generally agreed with the schedule of rates.

Sanction to Estimates To accord technical estimates for approved works on new open line works chargeable to CAP, DRF, DF and OLWR- SAG full power. Estimate costing other than track works between 2-10 crores require personal sanction of GM.

Excess over Estimates Upto 25% over the original estimated cost- SAG full powers. Upto 15% over the first revised cost- SAG full powers. Upto 10% over the second or further revised cost- SAG full powers. (This applies to rolling stock, track renewal works upto 2 crores).

Material Modification A material modification is any change in the scope of work as follows- (a) Any change in alignment likely to increase or decrease the length of the line by over 1 KM. (b) Introduction of any new station or omission of any station. (c) Introduction or omission of any work of facility involving an amount of Rs. 5 lakhs or above. (d) Any departure from standard of construction.

Material Modification Material modification between 15 to 30 lakhs should be certified and sanctioned personally by FA&CAO and GM. Sanction to material modification during the progress of work a revised estimate should be made and no liability to be incurred till then.

Deposit Works These are works of construction or repair the cost of which is met out of funds from non-railway sources. Example works executed by Railways for municipalities, local bodies private firms. Under supervision of Railways authorities. The cost of plan and estimates is to deposited with the railways.

Deposit Works The booking of expenditure is executed in the same as the railway works. A separate register of works is maintain with a separate account for each deposit work and reconciliation is done monthly. On completion of the deposit work the accounts office checks the completion report showing the variation of actual expenditure with sanctioned estimates.

Progress Report cum Financial Review Half yearly progress report is submitted to the Railway Board every ½ year. This enable to watch progress of work on new construction, open line works and track renewal works. These show the progress of work both physical and financial, actual and anticipated.

Progress Report cum Financial Review Gives the overall financial and physical progress with probable date of completion. Expenditure for the period ending 31 st March should not fall short of the actual expenditure to end of previous year + the final grant for current year. All excesses and savings are categorically explained.

Expenditure Control Expenditure Control- The sanction to an estimate constitutes authority for spending a specific amount on a particular work. Method of exercising control over expenditure- The control over expenditure on railways is exercised through:- (i) The preparation in advance of estimates of the expenditure; (ii) The allotment of funds through budget grants for the year on the basis of these estimates; and

Expenditure Control (iii) The continuous and concurrent review of the expenditure as incurred against the details of the estimates and against the sanctioned grants. Use of Works Register- The Works Register maintained in each division serve as an important management tool in providing information which enables a comparison of the expenditure incurred against a work with the provisions made in the estimate.

Expenditure Control Exchequer Control- Exchequer Control is an important tool for budgetary control and functions as a mechanism for concurrent regulation of cash outgo by each disbursing officer against the cash content of the budget allotment. Implementation of Exchequer Control (i) Correct assessment of the ‘cash’ and ‘adjustment’ portions of the sanctioned annual budget under each demand by cash disbursing officer;

Expenditure Control (ii) As accurate an assessment as possible of the quarterly requirement of cash; (iii) Issue of quarterly/monthly cash authorisation to disbursing officer; and (iv) Concurrent control of cash outgo by each disbursing officer.

Expenditure Control Budgetary Control over Revenue Demand- For exercising control over Revenue expenditure, Revenue Allocation Register serve as an important management tool. All revenue expenditure is recorded in this Register by various heads of accounts. A monthly comparison is made of the expenditure, with Budget Allotment. The Progress of expenditure is monitored through monthly Financial Reviews prepared by the Accounts Officers and furnished to the controlling authorities.