The Metro Railway organised a seminar on “Accrual Based Commercial Accounting in Indian Railways”, as a part of accounting reforms at Metro Rail Bhavan here.
Sanjoy Mookerjee, Financial Commissioner (Railways) and former Officio Secretary to the Government of India delivered the ‘key note address’ highlighting the need for the Accrual Based Commercial Accounting in Indian Railways to invite investment from the outside agencies.
Indian Railways maintain accounts principally on cash based system as per Comptroller and Auditor General (C&AG)’s guidelines.
Indian Railways needs funds for their projects and development work from outside agencies in the form of PPP, FDI and from institutional financers. Since Cash Based Accounting was not adequate enough in depicting the financial health the way the outside world understand, Accrual Based Commercial Accounting became inevitable to corporate work for their investments in Indian Railways.
Indian Railways have approached outside agencies through IRFC in the form of Tax Free Bonds.
Interestingly, the Tax Free Bonds have been oversubscribed by 2.5 times in the opening day itself and institutions like SBI have subscribed to 50% of these bonds.