Curb unauthorised expenditure on projects, Railways directs officials
The Railway Board racks the whip after audit reports pointed to huge unsanctioned expenditure in the last 5 years
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Context
The Indian Railways is grappling with significant financial indiscipline, as highlighted by a recent Comptroller and Auditor General (CAG) report. The report revealed unauthorised expenditure of ₹9,122.24 crore in 2023-24. In response to this and consistent pressure from the CAG and the Public Accounts Committee (PAC), the Railway Board has issued a directive to all its zones and production units to curb the practice of spending beyond sanctioned costs and seeking post-facto approvals.
UPSC Perspectives
Governance & Financial Accountability
This issue demonstrates the critical interplay between India's key accountability institutions. The process begins with the Comptroller and Auditor General of India (CAG), a constitutional body under , which audits government finances. The CAG's audit reports, which flagged the unauthorised expenditure, are submitted to the President, who lays them before Parliament. These reports are then examined by the Public Accounts Committee (PAC), a parliamentary committee which acts as a watchdog over public spending. The PAC's scrutiny ensures the executive, in this case, the , is held accountable for its financial management. The Railway Board's directive is a direct consequence of this institutional pressure. The article highlights a breakdown in financial propriety, where post-facto approvals become a fait accompli, undermining the very purpose of prior scrutiny and legislative oversight.
Economic & Public Finance
The article brings to light two core problems in public finance management within . First is unauthorised expenditure, where project costs exceed sanctioned amounts. The proper procedure in such a case is to prepare a revised estimate for approval by the competent authority before incurring the extra cost. By ignoring this, officials bypass necessary financial scrutiny. The second issue is the paradox of net savings (₹27,193.69 crore in 2022-23) coexisting with unauthorised overruns. This indicates inefficient financial planning and execution; while some projects overspend, allocated funds for other core activities remain unutilised, hindering the achievement of desired operational and infrastructure goals. This situation points to systemic flaws in budgeting, project management, and the overall efficiency of public expenditure.
Polity & Parliamentary Control
The issue of unauthorised expenditure directly challenges the principle of parliamentary control over finances, a cornerstone of India's democracy. According to of the Constitution, no money can be withdrawn from the Consolidated Fund of India except through an Appropriation Act passed by Parliament. When a department like the Railways spends beyond what was sanctioned, it subverts the legislature's 'power of the purse'. While such excess expenditure can be regularised later by the , its frequent occurrence weakens the sanctity of the budgetary process and legislative authority. This practice transforms parliamentary financial control from a proactive sanctioning process into a reactive, post-facto regularisation exercise, thereby reducing executive accountability.