Accounting reforms will reveal true picture of Railways: Prabhu

Railway Minister Suresh Prabhu on Tuesday said accounting reforms will help reveal the true picture of railways and go hand-in-hand with accountability to have a huge impact on productivity.

Accounting reforms are part of the large agenda of railway transformation, he said.

“Unless accounting and accountability go hand in hand we will not be able to achieve the whole thing. We are working on that,” he said at a CII conference on ‘Accounting reforms in Indian Railways - a strategic mission for sustainable growth.’ 

Accounting reform is a process of integration of various activities to reveal the true picture of Railways, he stressed.

“It is a massive concept. It is just not confined to rituals to single to double entry and so on. We want to bring the real transformational concept. This is part of the large agenda of railways transformation which includes ERP, complete transformation of railways entire business is operated,” Prabhu said.

After merger of Rail Budget with General Budget, accounting reforms is another big ticket reform agenda that the Railway Minister has undertaken. 

“We want to price our services. If you want to price the services then it cannot be done without costing,” he said.

Comparing accounting reforms with a health card, he said, “It is not maintaining accounts to display something that is the outcome of that particular expenditure. As we always believe accounting statement is a health card reflecting all your health parameters. Therefore, balance sheet should also look like that. In fact, it is not only Railways, the government as a whole is not preparing balance sheet.”

Highlighting the need for accounting reforms involving shifting towards accrual system of accounting from cash system, Prabhu said, “Unless you have that you will not be able to understand whether you have done well or where you are heading.” He said despite several suggestions for change in the accounting system in the past this has not been made. “We have decided to go ahead to have the entire discourses on the accounting reforms.”