Performance Budgeting in Indian Railways

The need for performance budgeting was recognised in the Indian railways as long ago as in 1927. For proper comparisons between budget estimates and actual results, it is necessary to have regard to the gross revenue upon which the estimated expenditures in the budget were based. It is necessary to separate between expenditures unaffected by annual and other variations in traffic earnings and expenditures which are so affected. Experience of earlier years makes it possible to differentiate between invariable and variable expenditures, A method has to be perfected whereby a more accurate idea can he obtained of the actual expenses as well as of what the budget estimate would have been had the actual variation in traffic receipts been known at the time the estimate was made.