Were you aware that the Indian Railways has its own governmental service office devoted to the railway’s accounting and financial management? Yes, it’s true, and it’s called the Indian Railways Accounts Service (IRAS). The office is manned by about 550 civil servants devoted to the financial management of the rail system. The IRAS was established in 1924 as an entity separate from the General Finances Department. The impetus for its separation was a 1921 recommendation from the Acworth Committee that the railway budget and financing should be handled apart from the rest of the government finances (i.e. the Indian Audit and Accounts Service), but still subject to the Auditor General of India. By April 1929, the IRAS Financial Commissioner was in full control of the organization.
The late 1950′s and early 1960′s were important growth years for the Indian Railways and for IRAS. More than 50 new employees were hired in the span of just three years, and huge investments from India’s second Five-Year Plan swelled the coffers of the IRAS. It was at this time that computerization began to take place, as the IRAS undertook to become a modern financial organization. However, hard times hit the Indian Railways in the 1990′s, due in part from expensive social pressures to increase services for the poor and unemployed. By the turn of the century, the IRAS was on the rebound, and by 2008 had a financial surplus.
Whenever an organization like IRAS has a surplus, it must decide on prudent investments to safeguard and grow the surplus. The financial managers at IRAS have any number of alternatives open to them, from open and closed-end mutual funds to issuance of fixed-income securities and investing in hedge funds or funds of funds. They have recently adopted a new software system, the Advanced Finance Railway Earning & Expenditure System, to help them properly oversee income, expenses and investments.
To ensure the highest level of professional leadership at the IRAS, recruitment of new employees via civil service examinations administered annually by the Union Public Service Commission of India. This commission selects middle- and top-tier bureaucrats for the government of India. The examinations are very comprehensive, consisting of a preliminary exam, a main exam, and an interview. Even though over 400,000 applicants take the civil service examinations each year, only a few hundred are accepted by the government. Those selected by the IRAS must then undergo a rigorous two-year training regimen before they are formally inducted into the service. Classroom training occurs at several locales, most recently at the Indian Institute of Management in Calcutta. Trainees are exposed to a wealth of business subjects, including information systems, public policy, marketing and finance.