Accountancy Systems in State Electricity Boards - Developments & Requirements

Gupta Ramesh

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: With the increasing importance given to the power development programmes in the successive Five Year Plans, proper and effective financial management of the State Electricity Boards (SEBs) have progressively become significant. The need for financial information with regard to SEBs’ operations would be strongly felt by the economic planners in allocating governmental resources and the financial institutions in lending the money. The management of the Board would require upto-date financial information in formulating major plans and policies, in controlling operations, and in setting suitable tariffs. The SEBs need to have an efficient and effective accounting system which would cater to such diverse needs. SEBs had their origin in the Public Works Department of the state government and the accounting system followed by SEBs is modelled on the one followed by PWD. Currently, cash and accrual concepts are intermingly used in keeping the accounting records. The system generates the data which are hard to interpret and use in a meaningful way. It is suggested that SEBs prepare Balance Sheet, Income statement and Funds Flow statement on commercial lines. Further, to have an effective Management Control system, use of responsibility accounting, performance budgeting, and need for standard costing to control the costs, cannot be minimised. A number of broad areas and approaches for cost reduction are outlined towards the end.

Date: 1980-05-01
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Persistent link: https://EconPapers.repec.org/RePEc:iim:iimawp:wp00392

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