Railway Board Urges Tight Financial Discipline
The Indian Railways has raised an alarm over the surge in unauthorised expenditure, which crossed ₹9,122 crore in FY 2023‑24. The Railway Board issued a note on 27 March 2026 directing all Zonal Railways and Production Units to curb the practice of incurring costs beyond the sanctioned cost and seeking post‑factum approvals.
Key Developments
- Railway Board orders General Managers to implement mechanisms that prevent post‑hoc sanctioning of overshoot costs.
- CAG highlighted 1,999 cases of unauthorised spending amounting to ₹9,122.24 crore for FY 2023‑24, up from ₹6,483 crore in the previous year.
- The issue has been taken up by the Public Accounts Committee (PAC) for detailed review.
- Railways recorded a net saving of ₹27,193.69 crore in 2022‑23, but the saving stemmed from under‑utilisation of funds rather than efficient execution.
Important Facts
• FY 2023‑24: ₹9,122.24 crore unauthorised expenditure in 1,999 cases.
• FY 2022‑23: Unauthorised spend of ₹6,483 crore in 1,932 cases.
• Total outlay for the railways in 2022‑23 was ₹6,47,031.69 crore (sanctioned grant) against actual spend of ₹6,19,837.90 crore, indicating a shortfall in asset creation and service delivery.
Exam Relevance
The episode underscores the challenges of fiscal prudence in large public sector undertakings. Aspirants should note:
- How audit institutions like CAG and parliamentary committees ensure accountability (GS2).
- The role of the Ministry of Finance in setting limits on project variations and cost overruns (GS3).
- The importance of Demands for Grants as a budgeting tool and the consequences of deviating from them.
- Implications for governance reforms, internal controls, and the need for real‑time financial monitoring in public enterprises.
Way Forward
To stem the tide of unauthorised spending, the Railway Board has recommended:
- Immediate preparation of revised estimates as soon as cost overruns become apparent, followed by prior approval from the competent authority.
- Strengthening of internal audit mechanisms and periodic compliance checks at zonal and project levels.
- Clear demarcation of authority limits as prescribed by the Ministry of Finance, with punitive action for violations.
- Regular reporting to the PAC and incorporation of its recommendations in the next budget cycle.
Effective implementation of these measures will not only safeguard public funds but also improve project delivery, a critical factor for India’s infrastructure growth agenda.