APPORTIONMENT OF EARNINGS-INDIAN RAILWAYS
Apportionment of Earnings means passing on the share of earnings to those Railways who have carried the traffic booked for transportation. Sometimes that railway may be neither originating nor terminating the traffic but carries the same over its system. Provisions contained from Para 3218 to Para 3224 of Indian Railway Code for Accounts Department envisaged the rules of apportionment. They are briefly outlined as under:
·The basic principle followed in the apportionment of earning is based on distance travelled by the passenger and distance/route carried in respect of goods traffic. The apportionment of Passenger/Freight earning from Bhubaneswar to New Delhi on distance basis is placed below.
Total Distance :1660.1
Total Distance :1656.32
The Railway apportioning the earnings makes an adjustment direct with each railway to which a share is due on interchanged traffic;
·In the case of traffic interchanged between the Indian Railways, the adjustment of Goods, Passengers and ‘Paid’ Parcels traffic devolves on the forwarding railway while the adjustment of ‘To-Pay’ Parcels traffic devolves on the receiving railway. No adjustment is made in respect of Excess Fare, Luggage, Animals and Birds etc. traffic, such earnings being retained wholly by the collecting railway.
·Sundry earnings are retained by the home Railway as the same is not apportionable.
·Each line is debtor for all outwards “Paid” and inwards “To-Pay” traffic.
It is relevant to examine as to why there should be apportionment of earnings amongst zonal railways when ultimately it is the performance of Indian Railway that matters. In this connection, it is pointed out that Zonal Railway is considered as Profit Centre which requires Earnings as well as expenditure. Divisions are not profit centre but they are Cost Centers. Profitability can be judged only when Earnings are apportioned. This method followed on Indian Railways has backing of Costing Practices followed in Corporate Sector as well.
In the traditional system of apportionment of earnings, zonal railways used to work out the net results of apportionment and communicate the same to other railways and thereafter the net results were posted in Traffic Book Part-B. However, the following difficulties were experienced.
i.Incomplete passing of shares by one railway to other railway leading to disputes.
ii.Twice accountal of invoices/passenger classification leading to incorrect apportionment of earnings.
iii.Non-updation of master indicating trains/routes/stations used to lead to incomplete apportionment.
In order to overcome the above difficulties, Centralized Apportionment system (CAS) has been introduced. In this system of apportionment developed by RITES, and co-ordinated by Central Railway, earnings for all sources viz. PRS, UTS, PCT, BPT and Goods were captured and consolidated and thereafter the apportionment is done by RITES. This system came into force w.e.f. April 2005 for Goods & April’2006 for passenger earnings, popularly known as CAS system i.e. Centralized Apportionment System of earnings
The data flow of different sources of earnings is as under.
·CRIS is responsible for submission of PRS & UTS data to RITES by 10th of following month.
·PCT & BPT data are to be submitted by Zonal Railways to RITES by 5th of the following month.
·Goods data should be submitted by zonal Railways through 7A statement by 10th of the following month.
·Clearance of unmatched items should be completed by 12th of the following month.
RITES generate Apportionment Matrix for five sources of Earnings separately viz., Goods, PRS, UTS, BPT and PCT by 20th of the following month and which are used by the zonal railways to prepare Part-B of Traffic Book. While apportioning the earnings among the Railways, only basic fare/freight is apportioned and all others charges like service tax, surcharges etc are excluded. Recently, the catering charges collected separately in the tickets for Rajdhani, Shatabdi/Duronto trains are excluded while apportioning the earnings and they retained by the collecting railways which also bear the expenditure relating to catering in these trains and to this extent RITES have modified their programme w.e.f. 1st April 2014.
Explanation with an example will enable better understanding of the process of Apportionment of Earnings. Some of the features of RITES Matrix are as under:
·The Matrix brings out Zonal Railway wise Inward Shares horizontally and Outward Shares vertically.
·It gives separate Matrix for Five sources of earnings as stated above.
·Figures in Rupees in thousands.
·For each Railway, details are given indicating Originating Earnings, Tax, Retained Share, Outward Share, Inward Share, and Total Apportioned Earnings.
·Apportionment factor is also indicated which is calculated as percentage of Apportioned Earnings to Originating Earnings. Illustrations of working out Apportioned earnings and Apportionment factor with the following data are as under:
Zonal Railway: East Coast Railway
(i)Originating Earnings- Rs.10429204 (000),
(ii)Outward share- Rs. 3783933(000), (iii) Inward Share- Rs.1923904, (iv) Retained Share- Rs.6645271 (000)
·I. Calculation of Apportionment earning = Originating earning - Outward share + Inward share
·Apportioned Earnings = 10429204 – 3783933 + 1923904
= Rs.8569175 (000)
Alternatively, Apportioned earnings can be worked out as under
Retained share + Inward share = 6645271 (000) + 1923904 (000)
= Rs.8569175 (000)
·II. Calculation of Apportionment factor: Apportioned earnings /Originating earnings X 100
·Example: Originating Earnings are RS.10429204 ( 000) for East Coast Railway for Goods in July,2014 and Apportioned Earnings are Rs.8569175 (000) and the Apportionment factor for Goods would be 8569175/10429204 multiplied by 100=82.16%.This will be used in working out Budget at various stages viz., August Review and Revised Estimates/Budget Estimates.
·Apportionment Earnings are derived as under:
Timely and accurate apportionment of earnings is possible only when the following steps are taken by zonal railways.
·Timely submission of data relating to different sources of earnings.
·Modification of master data at the time of introduction of new train or opening of new stations/sections for traffic.
·All unmatched are to be matched properly
It is to highlight that the present system of apportionment done by RITES has lot of benefits and some of them are highlighted below.
a.As the system is on-line basis, there is substantial saving of TA, DA & other allowances.
b.Timely generation of reports like 6A, 7C helps the management to take further steps for improving earnings.
c.Quick disposal of inter-railway disputes & issues through on line.
d.Accurate apportionment of earnings helps to judge the performance of Zonal Railways.