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The Railways wants to get better bang for the bucks on all spend. Towards this end, it has decided to take a ‘zero based budgeting’ approach to the financials of 2016-17, Railway Minister Suresh Prabhu said.
“Each rupee that gets expensed will be re-examined to ensure optimal productivity,” Prabhu said in his Budget speech.
Under zero-based budgeting, managers have to justify all of their budgeted expenditures. This is against the more common approach of only requiring justification for incremental changes to the budget or the actual results from the previous year.
Beyond book-keepingPrabhu also said that the Railways, as a thriving commercial entity, should establish an accounting system where outcomes can be tracked to inputs.
“This is a structural change which forms the bedrock of our transformation, as right accounting would determine right costing and hence right pricing and right outcomes,” he said.
“We intend taking up its implementation … on a mission mode and complete the entire roll out in next few years”.
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