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RailPro · Works, finance & administration

Railway finance & budget — questions with answers

21 questions on railway finance & budget, each with the answer and where it comes from. Try each one before you tap Show answer.

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Questions

Q1.Under which Article of the Constitution is the Consolidated Fund of India (Part I of Government accounts) constituted?

  1. Article 266
  2. Article 268
  3. Article 267
  4. Article 112
Show answer

Answer: (A) Article 266

Government accounts are kept in three parts: Consolidated Fund (Art. 266), Contingency Fund (Art. 267) and Public Account (Art. 268).

Source: RailPro e-book Vol 3, page 451

Q2.As per the canons of financial propriety, every Government servant incurring expenditure should exercise the same vigilance as ______.

  1. the sanctioning authority
  2. a contractor executing work
  3. an auditor checking accounts
  4. a person of ordinary prudence spending his own money
Show answer

Answer: (D) a person of ordinary prudence spending his own money

The first canon says expenditure should not be more than the occasion demands and the vigilance used should be that of a person of ordinary prudence.

Source: RailPro e-book Vol 3, page 452

Q3.As per para 301 of IRFC Vol. I, which of the following is NOT one of the three elements of every budget?

  1. An estimate of receipts and expenditure of the coming year
  2. Audit objections raised on the previous year's accounts
  3. A review of the preceding year's actual receipts and expenditure
  4. Proposals for meeting the requirements of the coming year
Show answer

Answer: (B) Audit objections raised on the previous year's accounts

Every budget contains a review of the preceding year, an estimate for the coming year and proposals for meeting its requirements; audit objections are not an element.

Source: RailPro e-book Vol 3, page 455

Q4.Expenditure on RDSO, surveys, Railway Recruitment Board and institutes like IRICEN is met from Demand No. ______.

  1. 3 – General Superintendence
  2. 12 – Miscellaneous Working Expenses
  3. 1 – Railway Board
  4. 2 – Miscellaneous Expenditure (General)
Show answer

Answer: (D) 2 – Miscellaneous Expenditure (General)

Demand No. 2 covers surveys, RDSO, Railway Inspectorate, statutory audit, RRB, Claims Tribunal, institutes like IRICEN etc.

Source: RailPro e-book Vol 3, page 463

Q5.The separate Railway Budget was merged with the General (Annual) Budget of the Government of India with effect from ______.

  1. 2016
  2. 2010
  3. 2019
  4. 2001
Show answer

Answer: (A) 2016

The notes record that the Railway budget was merged with the Annual budget w.e.f. 21.09.2016.

Source: RailPro e-book Vol 3, page 456

Q6.In the allocation of Capital (works) expenditure, payment to a contractor is booked under Primary Unit ______.

  1. 01
  2. 03
  3. 07
  4. 05
Show answer

Answer: (B) 03

Capital primary units include 01 Wages, 02 Casual labour, 03 Contractor's payment, 05 Stores from stock and 07 Credit for released material.

Source: RailPro e-book Vol 3, page 483

Q7.Which statement correctly distinguishes Revenue budget from Capital budget?

  1. Revenue covers new lines; Capital covers salaries
  2. Revenue needs no Parliament approval; Capital does
  3. Revenue covers maintenance and operation with benefit within the year; Capital covers assets whose benefit lasts many years
  4. Revenue is Demand 16; Capital is Demands 1 to 15
Show answer

Answer: (C) Revenue covers maintenance and operation with benefit within the year; Capital covers assets whose benefit lasts many years

Revenue budget (Demands 1–15) is for short-term maintenance and operation; Capital (Demand 16) is for new assets/replacements giving benefit over many years.

Source: RailPro e-book Vol 3, page 475

Q8.For 'charged' expenditure on Railways, the sanction is given by ______.

  1. the vote of Parliament
  2. the Railway Board alone
  3. the President, without the budget being put to the vote of Parliament
  4. the Comptroller and Auditor General
Show answer

Answer: (C) the President, without the budget being put to the vote of Parliament

Voted expenditure needs Parliament's approval, while charged expenditure is sanctioned by the President without a vote of Parliament.

Source: RailPro e-book Vol 3, page 454

Q9.Expenditure of Zonal Headquarters and Divisional Offices is covered under Demand No. ______.

  1. 1
  2. 12
  3. 3
  4. 9
Show answer

Answer: (C) 3

Demand No. 3, General Superintendence and Services on Railways, covers zonal HQ and divisional offices.

Source: RailPro e-book Vol 3, page 464

Q10.A budget is best defined as a statement of ______.

  1. actual expenditure of the previous year audited by C&AG
  2. estimated annual receipts and expenditure on both capital and revenue transactions
  3. the cash balance at the end of the financial year
  4. sanctioned estimates of all works in progress
Show answer

Answer: (B) estimated annual receipts and expenditure on both capital and revenue transactions

The notes define a budget as a statement of the estimated annual receipts and expenditure, both capital and revenue, of an organisation.

Source: RailPro e-book Vol 3, page 453

Q11.Demand No. 16, 'Assets – Acquisition, Construction and Replacement', is commonly known as the ______.

  1. Stores Grant
  2. Supplementary Grant
  3. Revenue Grant
  4. Works Grant
Show answer

Answer: (D) Works Grant

Demand No. 16 is otherwise known as the Works Grant, covering new assets, new lines and renewals/replacements.

Source: RailPro e-book Vol 3, page 471

Q12.In the allocation of Revenue expenditure, Primary Unit '04' stands for ______.

  1. House Rent Allowance
  2. Salary
  3. Productivity Linked Bonus
  4. Dearness Allowance
Show answer

Answer: (A) House Rent Allowance

Revenue primary units: 01 Salary, 02 DA, 03 PLB, 04 HRA, 05 CCA, 99 Other expenses.

Source: RailPro e-book Vol 3, page 482

Q13.Demands for Grants are presented for ______ expenditure, with credits and recoveries shown as footnotes.

  1. charged
  2. anticipated
  3. net
  4. gross
Show answer

Answer: (D) gross

Demands are for gross expenditure; credits or recoveries are shown as footnotes to the Demands.

Source: RailPro e-book Vol 3, page 457

Q14.Appropriation to DRF, Development Fund, Capital Fund and Pension Fund is made through Demand No. ______.

  1. 13
  2. 14
  3. 16
  4. 15
Show answer

Answer: (B) 14

Demand No. 14 is Appropriation to Funds (DRF, DF, Capital, Pension, etc.).

Source: RailPro e-book Vol 3, page 470

Q15.As per para 624 of the Engineering Code, the 'Works Budget' refers to ______.

  1. estimates of earnings from goods traffic
  2. estimates for staff salaries in the Engineering department
  3. the annual stores purchase programme
  4. revised and budget estimates for construction, acquisition and replacement of assets
Show answer

Answer: (D) revised and budget estimates for construction, acquisition and replacement of assets

The Works Budget is the RE and BE for construction, acquisition and replacement of assets, based on the Works Programme approved by Railway Board.

Source: RailPro e-book Vol 3, page 475

Q16.Expenditure on repairs and maintenance of track, buildings and structures is booked under Demand No. ______.

  1. 7
  2. 3
  3. 4
  4. 16
Show answer

Answer: (C) 4

Demand No. 4 covers Repairs and Maintenance of Permanent Way and Works (Abstract B).

Source: RailPro e-book Vol 3, page 465

Q17.At the end of the financial year, the document submitted to Parliament, duly audited by C&AG, to show that funds were used for the purposes for which they were demanded is the ______.

  1. Completion Report
  2. Revised Estimate
  3. Appropriation Account
  4. Budget Estimate
Show answer

Answer: (C) Appropriation Account

The Appropriation Account, audited by C&AG, shows that funds voted through the budget were actually used for the intended purpose.

Source: RailPro e-book Vol 3, page 480

Q18.As per para 625 of the Engineering Code, a Demand for Grant should ideally represent ______.

  1. a homogeneous activity controlled by a single departmental authority
  2. all expenditure of one Zonal Railway
  3. expenditure of one financial quarter
  4. only capital expenditure of a department
Show answer

Answer: (A) a homogeneous activity controlled by a single departmental authority

A Demand should represent a homogeneous activity under a single departmental authority, correlate costs to results and be balanced in total expenditure.

Source: RailPro e-book Vol 3, page 458

Q19.Coal, fuel oil for locomotives and electric energy charges for traction are booked under Demand No. ______.

  1. 10
  2. 8
  3. 12
  4. 5
Show answer

Answer: (A) 10

Demand No. 10, Operating Expenses – Fuel, covers coal, loco fuel oil and traction energy charges.

Source: RailPro e-book Vol 3, page 469

Q20.Which of the following is a canon of financial propriety?

  1. Every sanction must be issued by the Railway Board
  2. Expenditure may be incurred in anticipation of budget allotment
  3. Allowances such as TA should not become a source of profit to the recipient
  4. Public money may be spent for a section of the community if it is cheaper
Show answer

Answer: (C) Allowances such as TA should not become a source of profit to the recipient

One canon requires allowances such as TA to be regulated so that they are not a source of profit; public money must not benefit a particular person or section.

Source: RailPro e-book Vol 3, page 452

Q21.Demand No. 4 (Repairs and Maintenance of Permanent Way and Works) corresponds to which Revenue Abstract?

  1. Abstract E
  2. Abstract B
  3. Abstract C
  4. Abstract A
Show answer

Answer: (B) Abstract B

Abstract A is General Superintendence (Demand 3), B is P.Way & Works (Demand 4), C is Motive Power and E is Plant & Equipment.

Source: RailPro e-book Vol 3, page 476

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