Indian Railways’ Switch to Accrual-Based Accounting to Boost Green Financing
Indian Railways has transitioned to an accrual-based accounting system, a move that is expected to enhance financial transparency and facilitate resource mobilisation from multilateral agencies and green financing, according to a senior official of the Institute of Chartered Accountants of India (ICAI).
This transition is now operational across all 26 zones of Indian Railways for the 2023-24 financial year. ICAI President Ranjeet Kumar Agarwal stated, “The adoption of accrual accounting will simplify raising funds from agencies like the World Bank and promote green financing.”
Indian Railways has been working on this transition since 2014. The ICAI and its Accounting Research Foundation (ICAI ARF) have been instrumental in driving these reforms.
The new system reflects environmental sustainability initiatives in the financial statements for 2022-23 and places Indian Railways at par with developed economies.
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