INTRODUCTION

Of all business activities, budgeting is one of the most important and, therefore, requires

detailed attention.

Budgets can take many forms and serve many functions. Budgets can provide the basis for

detailed sales targets, staffing plans, inventory production, cash investment/borrowing,

capital expenditures (for plant assets, etc.), and on and on. Budgets provide benchmarks

against which to compare actual results and develop corrective measures. Budgets give

managers "preapproval" for execution of spending plans. Budgets allow managers to provide

forward looking guidance to investors and creditors. Budgets are necessary to convince

banks and other lenders to extend credit.

Budgetary control is the process of ascertaining several budgeted figures for the future of a

business enterprise and then making comparison of these budgeted figures with the actual

results for finding out discrepancies, if any. The comparison of budgeted and actual figures

will allow the management to take curative actions at a proper time.

Budgetary control can be defined as, “A means of achieving the financial control of an entity

whereby the actual results for a defined period of time are compared with the budgeted

results, any differences (or variances) being noted, and some corrective action taken to bring

the actual activities back into line with the budgeted ones if such variances need to be dealt

with.”

1
 Theoretical aspects of budget & budgetary control
Introduction:
Planning is the basic function. It helps determining the course of action to be followed
for achieving organizational goals. It is decision in advance, what to do, how to do and who
will do a particular task? Plans are famed to achieve better results. Control is the process of
checking weather the plans are being adhered to or not, keeping a record of progress,
comparing it with the plans, and then taking corrective measures for future are any deviation.
Even business enterprise needs the use to control techniques for surveying in the highly
competitive and changing economic world. There are various controls devices in use.
Budgets are the most important tool of profit planning and control. They also act as an
instrument of co-ordination.
Meaning & Definition of Budget
Meaning of a budget:
A budget is the monetary or quantitative expression of business plans and policies
pursued in the future period of time. The term budgeting is used preparing budgets and other
procedures for planning co-ordination and control of business enterprises.
Definition:
According to CIMA, official Terminology, “A budget is a financial and quantitative
statement prepared prior to a defined period, of time, of the policy to be pursed during that
period for the purpose of attaining a given objective”.
According to Crown and Howard, A budget is a predetermined Statement of
management policy during a given period, which provided a standard for comparison with the
result actually achieved.
Meaning of Budgetary Control:
Budgetary control is the process of determining various budgeted figures for the
enterprises for the future period and than comparing the budgeted figures with the actual
performance for calculating variances, if any. First of all budgets are prepared and hen actual
result are recorded the comparison of budgeted and actual figures will enable the
management to find our description and take remedial measures at a proper time. The
budgetary control is continuous process, which helps in planning and co-ordination. It
provides a method of control too.

2
Definition:
According to Brown and Howard a budgetary control is a system if controlling costs,
which includes the preparation of budgets, coordination the department and establishing the
responsibilities, comparing actual performance with the budgeted and acting upon result to
achieve maximum profitability.
According to Weldon he criticizes budgetary control as “planning in advance of the
various function of a business so that the business as whole is controlled”.
Budget, Budgeting & Budgetary Control:-
A budget is a blue print of plan expressed in quantitative terms. Budgeting is
technique for formulating budgetary control, on the hand; refer to the principles, procedures
and practices of achieving given objective through budgets.
Definition:
According to Rowland and William have differentiated the three terms as;
‘Budgets are the individual objective of a department, etc., where as Budgetary many be said
to be the act of building budgets. Budgetary control embraces all and in addition includes the
science the budgets to affect an over all management tool for the business planning control.

3
 NEED FOR THE STUDY

Finance is so basic that it cannot be considered a separate function. Evaluation of

financial performance of an organization is continuous process for understanding the
direction in which the organization is heading so as to plan, decide and implement the future
course of action with a view to achieve the present objectives in the interest of the
organization. Financial management is a part of total management and it has more
importance when compared to the rest of the concepts of management studies, because of its
nature, scope application acceptability standards.
The situation created an interest for me to study and analysis the financial aspects of
this VCHD. Through budget and budgetary control of an organization is moving so as to
decide and compliment the future course of action to achieve the objectives of the
organization. The firm investment and financing decisions unavoidable and continuous. In
order to make them rationally, the firm must have a goal. It is generally agreed in theory that
the financial goal of the firm should be the maximization of owner’s economic welfare could
be maximized be maximizing the shareholders wealth maximization is theoretically logical
and operationally feasible normative goal for guiding the financial decision making.

4
 OBJECTIVES

 To ensure planning for future by setting up various budgets. The requirement and

expected performance of the enterprise are anticipated.

 To create definite ideas in terms of number about the long term and short term desired

aims and objectives of the enterprise.

 To perform integration and coordination among the different departments and

activities.

 To motivate and related departments and persons for attaining the desired ends and

goals.

 To operate various cost centers and departments with efficiency and economy.

 Elimination of wastes and increase in profitability.

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 METHODOLOGY

Methodology is a systematic procedure of collecting information in order to analyze

and verify a phenomenon. The collection of information is done by two principle sources:
1. Primary Data
2. Secondary Data

Primary Data:
It is the information collected directly without any references. In this study it is to be
gathered through interviews with concerned officers and staff, either individually or
collectively. Some of the information were verified and supplemented through personal
observation. The data collection includes conducting personal interviews with the concerned
officers of officers of finance department of Visakhapatnam Dock Labour Board.

Secondary Data:
It was collected from already published sources such as pamphlets of annual reports,
returns and internal records. The data collection includes collection of required data from
annul records of Visakhapatnam Dock Labour Board and reference from text books and
journals relating of financial management.

6
 LIMITATIONS

The budgetary control system is however not free most short comings which are a
follows.

 This system proves useless in those firms where policies and processes, techniques,
etc., are frequently changing since it does not take into account such charges.
 It is very costly in case of small firms and serves no purpose in the event of abnormal
situation, such as strikes, lockouts, etc.
 There are many factors over which the management has no control but the budgetary
control depends on them. In that case, if it is prepared, it may be inaccurate and fails
to serve the purposes for which it is meant.
 One of the most limiting factors for a thorough and complete study of the subject has
been the insufficient period of study.
 Elaborate study was not possible due to lack of financial resources.
 Executives are not available because they were involved in various activities in
dealing with their market and stores.

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 INDUSTRY PROFILE

INTRODUCTION:
Visakhapatnam Port is one of the 12 major Ports in India. The port lies on the eastern
coast of India and midway on the rail route between Kolkata to north-east and Chennai to the
south. It is situated at the mount of river “Magadri Gedda”, and adjoining the “Dolphin
Nose” a Hill nearby projecting into the Bay of Bengal. This Port has been so laid out as to
have the advantage of natural protection offered by this Hill to the ships carrying cargoes
from cyclones which are usual on this coast during the North east monsoon. And, another
favorable and important factor to this Port is a low tidal range. Thus, the Visakhapatnam Port
is considered as a natural port, attracting the many cargo ships for shipments etc.
Visakhapatnam Port started functioning during the year 1933 and later formed into a
Trust under Major Port Trusts Act. In Visakhapatnam Port, there are two major cargo
handling autonomous bodies, viz., Visakhapatnam Port Trust & Visakhapatnam Dock Labour
Board (VDLB). The Visakhapatnam Dock Labour Board was established during 1961 under
Dock Workers (Regulation of Employment) Act 1948. However, during Sep.2008, the
Visakhapatnam Dock Labour Board merged into Visakhapatnam Port Trust (VPT) as one of
its Divisions, as Cargo Handling Division, in Traffic Department.
Ports are commonly known as places of safe shelter with necessary infrastructure for
purpose of trade. In that view there is airports; seaports are gateways to the world. Seaport is
the essential link, in the international maritime transport chain. Seaports play a very
important in one countries growth. At present over 80% of all international trade goes up by
sea. In the case of development country like ours percentage of international trade would be
in the range of 70%-80%. So there is an imperative need for all the sea ports in our country to
expand very rapidly to have economic growth and for well being of our country in all its
various factor. Technically speaking port is one which handles not less than one million tone
of cargo annually and which posses harbors and other facilities to receive ships of 4000 DWT
or more. Example: Mumbai, VSP etc.
In case of developing countries like ours there is imperative need for growth of
foreign track certain important machinery and equipment. Thus international trade is the
principal generates of economic growth. Growth occurs, where trade increased while growth
itself creates more trade. Ports are meant to provide sea borne vessels, some basic services
such as dock, harbor, or as berth facilities for the ships and landing facilities for the cargo. A

8
part from this port provides cranes, ware houses, labour for cargo handling transport.
India is situated at the head of the Indian Ocean with a coast-line of about 3535 miles,
and occupies an important place in the maritime world. There are about 232 ports in India, of
which 12 are major ports, 14 intermediary ports, 132 minor ports and 76 sub-ports. As a
country having a coastal line of about 6000 kms and major ports and minor ports are situated
along the coastal line and at sea islands.
The twelve ports are:
kandla port (Gujarat)
Mumbai port (Maharashtra)
Para deep port (Orissa)
Jawaharlal Nehru port (Mumbai)
Cochin port (Kerala)
Chennai port (Tamil Nadu)
Kolkata port (West Bengal)
Tuticorn port (Tamil Nadu)
Visakhapatnam port (Andhra Pradesh)
Haldia port (West Bengal)
Mormugoa port (Goa)
Mangalore port (Karnataka)
In these twelve ports, six ports are situated on East coast and are as follows:
Chennai port (Tamil Nadu)
Para deep port (Orissa)
Kolkata port (West Bengal)
Tuticorn port (Tamil Nadu)
Visakhapatnam port (Andhra Pradesh)
Haldia port (West Bengal)
The remaining six ports are situated on west coast:
kandla port (Gujarat)
Mumbai port (Maharashtra)
Jawaharlal Nehru port (Mumbai)
Mormugoa port (Goa)
Mangalore port (Karnataka)
Cochin port (Kerala)

9
 IS O 9 0 0 1 , IS O 1 4 0 0 1 & O H S A S 1 8 0 0 1

J AMMU
&
KASHMIR
M a jo r p o rts o f In d ia
HIMACHAL

PUNJ AB
ARUNACHAL
LU C K N OW PRADESH
HARYANA
SIKKIM ASSAM
RAJ ASTHAN UTTAR
PRADESH
NAGALAND
MEGHALAYA
BIHAR MANIPUR
K a n d la TRIPURA
MIZORAM
MADHYA PRADESH BENGAL
GUJ ARAT
K o lk a t a / H a ld ia
JN P T ORISSA
M u m b a i MAHARASHTRA P a r a d ip

ANDHRA VPT
M o rm u g ao PRADESH
GOA

N e w M a n g a lo re
KARNATAKA
E n n o re
K oKERALA
chi Chennai
TAMILNADU

T u tic o r in

10
The medium ports in India are:

 Bedi Bunder
 Bhavnagar
 Calicut
 Cuddalore
 Gopalpur
 Kakinada
 Karwar
 Magdalla
 Mandavi
 Navlakhi
 Nagapattinam
 Okha
 Porbandar
 Redi
 Salaya
 Sikka
 Trivandrum
 Veraval

The minor ports of India are:

 Azhikkal
 Belikeri
 Beypore
 Cannanore
 Coondapur
 Dahej
 Jafrabad

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  Jakhan
 Kasergode
 Mundra
 Neendakara
 Pindhara
 Pipavav
 Ponnani
 Tellicherry

The Private ports in India are:

 Cocanada
 Tuticorin Container Terminal
 Pipavav
 Adani

The main activities of port are:

 Maintenance of port approaches, navigable channels, and alongside berths, dredging,
conservancy, hydrographic surveys.
 Pilot age, towage, berthing and unberthing of visiting ships.
 Handling, warehousing and transportation of goods in port area.
 Civil, mechanical and electrical engineering and maintenance of harbor crafts and
plants.
 Fire fighting and fumigation.
 Stores.
 Medical, welfare, housing etc.,
 Management of port properties and estates.
To carry out various activities, each port engages different types of Labour. The
workers employed by the port authorities are generally called ‘Port Workers’ and they work
on shore. For work on board the ship, workers registered with Dock Labour Board (DLB)
known as ‘Dock Labour’ are engaged. The DLB has been amalgamated into VPT w.e.f.

12
26.09.2008 duly renamed as CHD (Cargo Handling Division) functioning under the control
of Traffic Manager.
Ports are classified as Major ports, Medium ports and minor ports. The Major Port
Trust Act, 1963 and the Indian Sea Ports Act, 1908, generate the Major ports and the rules
and regulations framed there under.
Each Major port has a Board of Trustees representing various interests connected with
the port operations and the shipping industry. The Chairman of each Major Port Trust is
appointed by the Central Government. Besides Chairman, the Port Trust Board consists of
Deputy Chairman, representatives of Customs, Railways, Defense, State Government, Ship
owners, Shippers, etc. All the members of the Board, Chairman and the Deputy Chairman are
part time members.

VISAKHAPATNAM PORT VIEW

STP
BELT CO

EQ9
OHC WQ7

8
EQ
6
Q
W

7
EQ
W Q5

Indian
6
EQ

NAVY
W Q4

5
EQ
No

m
EQ 4
rth

r
WQ3

A
W

n
EQ 3
r
es

W Q2

orthe
ter

EQ 2

13
nA

Q1
14
Visakhapatnam was an ancient port city, which had trade relations with Middle East and
Rome. Ships were anchored at open roads and loaded with cargo from Visakhapatnam shore
by means of small boats.
Visakhapatnam Port is one of the major ports on the eastern seaboard of Bay of
Bengal at a latitude 170 41’N & longitude 83018’E. It is situated in between Kolkata &
Chennai Ports. It has acted as a catalyst in the process of Industrialization of its hinterland
along with other ancillary industries. The Port plays a dynamic role in fostering accelerated
development in the region shall contributed significantly to the National Development.
Natural Harbour:
Visakhapatnam is one of the best, natural ports in India and its location provides
protection from cyclones, which strikes the east coast regularly during May/November. The
‘Dolphin’s Nose’ hills which is to the south of the entrance channel, Ross and’ Durga hill’
which are to the north of the entrance channel are land forms which provide tranquil waters
for the port for the outer harbor, to artificial break waters provide necessary conditions for
tranquil waters. This low range of a maximum of 1.82 meters this section of the sea is
advantages for the location of the port.
History:
The origin of Visakhapatnam goes back as far as the 6th Century, when it formed a
port of the famous kingdom of kalinga in 6th century A.D. Kalinga was conquered by the
chalulkyas of Bandai and in the 7th century by eastern chalulkyas, which led to the
establishment of the avenge kingdom under Vishnu Vardhan – 1 (615 – 633 A.D.).
Visakhapatnam, the anglicized from of which is Visakhapatnam is an ancient town.
According to the district manual writers 1989, in the early years of 14 th Century Kullotunga
choler of the Andhra Dynasty visited the presented site of Visakhapatnam and was so pleased
with the place that he built a temple dedicated to Issaquah. The sea has since engulfed this
temple.
In 1858 a survey partly stressed the need for a major port between Madras & Calcutta.
A detailed report called “Visage the port of central provinces” in 1877 made out a strong case
of the establishment of a port. How ever this proposal was temporarily frozen due to the
advent of the First World War.
It is only in 1914, that the Bengal Nagpur Railway initiated a proposal for a harbor at
Visakhapatnam. Colonel Cart Wright Reid of the British Admiralty initiated a proposal for
the construction of a harbor at the mouth of river meghadrigedda for B.N.Railways, which

15
was finally adopted in 1922. The construction started in 1927 and the port was open to ocean
going vessels in 1933 with the arrival of passenger ship S. S. Jala durga. The Bengal, Nagpur
Railway was responsible in constructing the port, as it needed a sea outlet for Manganese is
mined in the central provinces. (M. P.).
His Excellency Lord Wellington formally inaugurated the port, the then Viceroy &
Governor General of India on 19th Dec. 1933. The Island breakwater was constructed by
sinking 2 old ships “Janis” and “Wellston “ which acted as a skeleton around which a rubble
mound was formed. Mr. W. C. Ash & W.B. Rattenbury was the engineer who played
prominent role in constructing this beautiful harbor. The port was constructed at a cost of
Rs.378 lakhs and when it was opened it consist of three berths & handled 1.3 lakhs tones of
Traffic.
Visakhapatnam was a minor port; ships were anchored in the open of shore area and
the cargo transported in small muscular boats. The gained the status of a major port in 1963
and it was in February 1964 that the Visakhapatnam port was constituted.
V.P.T Berths
Inner Harbor:
Multi purpose: 14
Oil: 2
Mooring: 1
Fertilizer berth: 1
__________
Total: 18
__________
Outer Harbor:
LPG Terminal: 1
ORE: 2
GCB: (South/North): 2
OSTT: 1
Multipurpose: 2

: _____________
Total: 8
_____________

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Location:
Visakhapatnam port lies on the Eastern seaboard of India in the state of Andhra
Pradesh, midway between Kolkata and Mumbai rail route. This harbor situated in the mouth
of Meghadri Gedda is natural and is connected to the sea by a narrow channel. It is a well-
protected deep-sea port formed by a turning basin and three arms. The approach to the harbor
is through a channel about 1km. in length.
Latitude – 17’41 North
Longitude – 83’18 East
With the protection afforded by a high promontory into the sea known as ‘Dolphin’s
Nose’ and a low tidal range to a maximum of a 6 feet (1.82m), the location of the port is
ideal. Though the construction of the port is started in 1927, Visakhapatnam port took its
concrete shape in 1933 as a mono-commodity port initially and blossomed shortly into a
multi-commodity port with a variegated cargo profile. This port is enriched with a naturally
protected deep-water basin, most suitable for deep draft berths. It is located in such a way that
it offers protection from the cyclonic storms which strike the East Coast, by a high
promontory into the sea, popularly known as Dolphin’s nose hill which is to the south of
entrance channel. This port was the first port in the country, to build an outer port.
Visakhapatnam Port Trust was an ancient port city, which had trade religious with
Middle East and Rome. The construction of harbor at Visakhapatnam was thought after the
transfer of power from East India Company to the crown. In fostering the countries foreign
trade and economic development Visakhapatnam is playing a vital role. Visakhapatnam is a
natural harbor such that surrounded by chain of hills providing safe anchorage to ships.
Notable among the chain of hills are Dolphin’s nose Ross hill.

Perspective plan for Visakhapatnam port 1996-2020:

The Port desires to ahead & peep into the future to enable it to formulate appropriate
developmental, operational & management strategies to fulfill to avowed policy of providing
a high standard & efficient port services to its customers clientele. Accordingly, the research
planning department of port trust was entrusted with the task of preparing the “perspective
plan” in consultation with the other developments of the port & concerned authorities
associated with the port industry. The study divided into 4 parts.
 Technology Perspective.
 Cargo Perspective.

17
  Developmental Perspective.
 Organization Perspective.

The main aim of this perspective plan is to provide qualitative services a service no
way second to that of services provided by the other party in the world to it’s customers,
through adequate & efficient port facilities that meet & fulfill the demand from the increasing
cargo through out from the port to year.

Environmental Improvement Measures:

Port gives importance to the environmental protection. Plantation of 1, 40, 000 plants
to provide green belt and mitigate dust pollution. Purposed in 1998-1999, 25000 Plants.
Environmental Park in Kailasa hills amount spent so far is an Rs.8.5 Crores.

Salient features of VPT:

 Opened in 1933 with 3 berths and initial investments Rs.3.7 Crores. Cargo throughout
in the first year of operation was Rs.1.3 lakh tones.
 First port to construct a deep draft outer port way back in 1967 to accommodate large
iron ore and oil carrier’s up to 1, 50, 000 DWT.
 First port among the major ports of India to construct a deep draft bulk berth having
draft up to 16m way back in 1976.
 First port among the major ports of India to introduce computerization.
 First port on East Coast of India to accommodate Suezmax tankers drawing 270
MLOA along side berth.
 Recipient of “Best Port of the Nations” award in 1988-1989 for highest sale of
efficiency.

Objectives of Port:
The main objective the port is to facilitate the import & export cargo on sea through
ships. By this the very benefit that occurs to the nation follows:
a). Securing the required goods for the country.
b). Exporting the surplus cargo from the country.
c). Maintaining the economic balance within the country.
d). Earning foreign exchange to the country.

18
Set –Up of the Organization:
Each major port has a Board of Trustee’s representing various interest connected with
the port operations & the shipping industry. The chairman of each major port trust is
appointed by Central Government Besides, Chairman the port trust Board Comprises Deputy
Chairman, representatives of Customers, Railways, Defense, State Government, ship owners,
shippers, Labour etc. All members other than the Chairman & Deputy Chairman are port
time members.
There are 10 departments in Visakhapatnam Port Trust and those departments are
categorized under 2 heads:
I) Non-Operational Departments
II) Operational Departments

NON-OPERATIONAL DEPARTMENTS
 Administration Department
 Finance Department
 Personnel Department
 Research’s Planning Department
 Materials Management Department
 Medical Department.

OPERATIONAL DEPARTMENTS
 Marine Department
 Traffic Department
 Mechanical Department
 Engineering Department.

FUNCTIONS OF DIFFERENT DEPARTMENTS

1. Administration Department:
The Secretary heads the department. The functions of this department are like General
Administration Policy, Board matters, legal matters & Co-ordination and Public
Relations/Guest houses.

19
2. Accounts Department:
Financial adviser & Chief Accounts Officer head this Department. The functions of
this department are Managing Finance matters, preparation and computation of budgets; inter
audit and revenue realization etc.

3. Personnel Department:
The Department is headed by manager (Operations). The matters related to personnel
policies and the recruitment of employees, sanctioning of posts, their welfare, needs, training
on personnel matters & Industrial relations etc. It is responsible for creating and conducting
harmonized relations in the organization, so as to achieve maximum productivity & better
facilities in the work.

4. Research & Planning Department:

This Department consists of compiling information, port statistics; project capital
budgets, forecasting trade, traffic analysis trade promotion, data processing of wage bills
through Information Technology and Telecommunications etc.

5. Materials Management Department:

Chief material manager heads this department. The function of this department is
procurement of materials, storage of stores & supply to all departments as per requirements
& norms.

6. Medical Department:
Chief medical officer heads this Department. It provides health, sanitary & medical
facilities to the employees of all Departments of Port Trust.

7. Marine Department:
This is under the control of deputy conservator. It is responsible for safe navigation of
vessels and berthing, Pilotage, maintenance of dredging the port, fire service and other
functions of this department.

8. Traffic Department:

20
 Traffic Manager heads this Department. The activities of this Department are
responsible for smooth flow of traffic by allotting berths to the ships visiting the port&
collects berthing charges, rail traffic operations.

9. Mechanical Engineering Department:

This Department is under control of Chief Mechanical Engineer. It maintains all
electrical & Mechanical equipment and executed projects works regarding purchase &
Installation of big electrical or mechanical equipment.

10. Engineering Department:

Chief Engineer heads this Department. The functions of this department are construction
of project works and maintenance of civil works like building quarters & mainly berths
etc.

The Chronological Events of developments in Visakhapatnam Port:

The need for a port in this part of the country was emphasized as early as in 1858 in a
report of a British Survey Party. This was underlined in the report titled “Vizag, the Port of
Central Provinces” (1877). Mr. E.S. Thomas, while submitting the proposals for creation of
the port in 1872 described it as the most natural and most easily formed port’ on the east
coast of India. The daughter of Sir Arthur Cotton described the Harbour as a natural outlet
for northern India by a direct railway to Allahabad and observed the location as a strategic
point on the eastern coast where incomparably the `best Harbour’ can be made by a single
breakwater run out from the bold promontory of the Dolphin’s Nose.
It was only in 1914 that the proposal for construction of a Harbour at Visakhapatnam
was initiated by the then Bengal Nagpur Railway and in 1922 a proposal of Col. H.
Cartwright Reid of British Admiralty for the construction of a harbour at the mouth of river
Meghadrigedda was adopted.
The construction work, which started in 1927 continued up to 1933, and the first
commercial vessel S.S. JALADURGA of M/s. Scindia Steam Navigation Co., entered the
Port on the 7th October 1933 providing initially a sea outlet for Manganese Ore.
The Saga of the construction of the Harbour particularly forming of entrance channel, sinking
of two old ships `JANUS’ and `WELLESDONE’ to form breakwater instead of building a
wall in the sea were all feats in engineering and are subjects of discussion even today. Mr.

21
W.C. Ash and Mr. D.B. Rattenbury were the Engineers who played prominent role in
constructing this beautiful Harbour. His Excellency Lord Wellingdon, the then Viceroy and
Governor General of India formally inaugurated the port on 19th Dec. 1933.
Nestling among a chain of hills, the Vizag Harbour is really one of the wonders of the
nature, as if it has been intended by God that a man in this area must benefit by a very safe
anchorage to ships. The entrance channel is protected by, two massive rock hills, namely
Dolphin’s Nose on the Southern side and Ross Hill on the Northern side and these two hills
shelter a bay which possessed sufficient depth for the ships which were engaged in sea trade
up to 1950s. The high promontory of the Dolphin’s Nose hill into the sea provides protection
from cyclones, which strike the East Coast. The low tidal range of a maximum of 1.82
meters is also advantageous for the location of the Port. The existence of this natural Harbour
has transformed the sleepy fisherman village once called as `Vizag’ into one of the fastest
growing industrial cities of the world.
The Port has striking similarities with Durban Port of Africa in the sense that the later
is also surrounded by a hill on the South Side. It is due to this reason that Engineer Mr. W.C.
Ash studied Durban Port before developing this Port. Mr. Chalapathi Rao, one of the famous
writers described the Docks and Harbour works of this Port as `Picasso’s cubist pictures. The
port Administration which was under Bengal-Nagpur Railway in 1933 passed through
different departments and Ministries of the Government. of India till its transfer to the Port
Trust in Feb. 1964 under the Major Port Trusts Act, 1963 as shown below:

1926-35 RAILWAY BOARD

1935-37 COMMERCIAL DEPT.
1937-42 COMMUNICATIONS DEPT
1042-44 WAR TRANSPORT DEPT
1944-46 DEFENCE (WAR) DEPT
1946-56 BENGAL NAGPUR RLY
1956-64 MINISTRY OF TRANSPORT
1964-FEB TRUST, UNDER MPT ACT

When opened for sea going vessels in 1933, the port had only three berths with a cargo
handling capacity of 0.3 million tonnes. The chronological events of developments are
described in the succeeding paras.

1951-61: During this period, three jetty berths and one quay berth (EQ.4) were
constructed. One transit shed (T-5) was built and T-1 was upgraded.

22
To enable M/s. Caltex (renamed as M/s. Hindustan Petroleum
Corporation Ltd.) to establish a refinery and to facilitate discharging
crude oil and pumping petroleum products direct to/from the storage
tanks, an oil wharf consisting two oil berths was constructed in 1957.

During 1950s, slings and pallets for cargo loading/unloading were

introduced which were later augmented and replaced by grabs.
Electrical wharf cranes of 3 tonne capacity, fork-lift-trucks of 1 to 3 tonne capacity and a
floating crane of 30 tonne capacity were procured during the 1950s. A self-propelled 150
tonne floating crane, “Bheema” – the first of its kind in major ports was added to the fleet of
craft. Facilities for discharge/pumping of mineral oils, through pipelines, direct to the storage
tanks of the refinery were introduced in 1957.

1961-71: In tune with the deployment of specialized ships for specific cargo and to fulfill
the long term agreement entered by the Government of India for exporting Bailadilla ore to
Japan, two captive berths were added in 1965.

In order to meet the long term ore export commitments to Japan, the system of loading iron
ore by semi-mechanised means was dispensed with. A Mechanical ore handling plant to load
iron ore at the rate of 8000 TPH – the first of its kind in the Indian Port Sector and acclaimed
as `Gem of Automation’ was built in 1965.

In response to requirements projected by a private fertilizer factory M/s. Coromandel

Fertilizers Ltd., a captive berth for unloading fertilizers was constructed in the year and
leased out way back in 1967 and thus earned the reputation of the first major port to
introduce the concept of privatization. Mechanised facilities for discharging fertilizer raw
materials through conveyors were introduced in 1968. Also, two multi-purpose cargo berths
were commissioned during 1966-68 to meet increasing trade demand.

1971-81: The closure of the Suez Canal in the mid sixties necessitated the deployment of
deep draft tankers in the global shipping. To meet this challenge, an oil mooring was
developed in 1976 to accommodate large crude ships. In consonance with the changing
technological trends in shipping and transportation systems, an outer port was commissioned
in 1976 to accommodate ships of size 150,000 DWT at a cost of about Rs.110 crores, which
stands out as the biggest expansion programme of the Indian Port Sector during the firth five

23
year plan. The outer port construction gave further fillip to the cargo throughput and in the
succeeding years, the cargo throughput at outer port dominated the founding port (inner
port). The primary objective of the outer port was to provide an outlet for export of iron ore
through deep draft bulk carriers.

1981-91: As a response to the increasing trading of oil by large crude carriers, an off shore
tanker terminal to accommodate crude tankers up to 150,000 DWT was commissioned in
1985. In conformity with the increasing trading of bulk carriers of 50,000 to 85,000 DWT, a
General-cum-Bulk cargo berth to cater to ships up to 60,000 DWT was commissioned in
1985.

1991-2001: Keeping in view the changing needs of sea transportation system, the old jetties
were converted into a regular quay berth with more apron width in 1992 and 1994 to facilitate
installation of heavier loads. A multi-purpose berth to cater to ships up to 11 mtrs. Draft was
commissioned on 30.7.1995. An exclusive and specialized terminal for discharging LPG
from gas carriers at the outer harbour was constructed in 2001.

2001-2006:

Berths: The first BOT project - Container terminal at outer harbour - commenced its
operation in June, 2003 which was concession to Visakha Container Terminal P Ltd.,- A
Joint venture company owned by Dubai Port International and J.M. Baxi (P) Limited. Two
new berths in the extended Northern arm of Inner Harbour (EQ.8 & EQ.9) were developed on
BOT basis by M/s.Vizag Sea Port Pvt. Ltd., a Joint Venture between Portia Management
Services, U.K. & M/s.Gammon India Ltd., Mumbai and commissioned during 1994 and
1995. One multi purpose berth WQ-7 in the inner harbour was commissioned on 29 th July
2005 by Hon able Minister for Shipping, Road Transport and High ways.

Other facilities: One 50 tonne BP tug was commissioned in the year 2000-01. Ten No’s of
15 Tonne Electric Wharf cranes were commissioned in 2001. Mechanised dust suppression
system designed and erected by MECONS was commissioned on 5th June 2002. One rail
mounted stacker of 2700 TPH capacity was commissioned on 28th May, 2003. One No. fire
float of Agni Class-I was commissioned on 2nd September, 2003. Four wharf cranes of 20
Tonne were commissioned in 2004-05. One FRP launch was commissioned on 2nd January,
2005. One dredger built by M/s. Hindustan Shipyard Ltd., was commissioned on 9th Feb.

24
2005. Information Technology was introduced into port operations 1st. April, 2002.

OUR VALUES

 Quality and productivity in performance

 Concern for safety and environment
 Responsive and Transparent administration
 User friendly attitude
 Teamwork
 A learning environment
 Innovation

OUR STRENGTH

 Tranquil deep water berths to handle cape size and Suez

max vessels
 Efficient Port Railway system acclaimed as the best among
major ports in the country and ranked as one of the top ten
railway divisions of the country.
 Economic stevedoring cost
 Dedicated facilities for bulk handling
 Harmonious industrial relations
 Quality service at optimum cost

 Natural positional advantage for trading with countries like

Bangladesh, Myanmar, South East Asia and far East and
West coast of USA and Canada.

Coking coal facilities:

IRON ORE

25
 BULK

SHORE EQUIPMENT

Availability in
Description Capacity
Nos.
Electric Wharf Cranes 10 T 11
Electric Wharf Cranes 15 T 10
Electric Wharf Cranes 20 T 04
Mobile Cranes ( 4 and
47.05 T 02
16)
Fork Lift Trucks 03 T 09
Fork Lift Trucks 10 T 01
Fork Lift Trucks 12 T 02
Top Lift Carrier 42 T 01
Locos ( General
1400 HP 12
Traffic)
Locos ( O H C ) 1430 HP 07

26
 CONTAINER HANDLING FACILITIES

A state of the art container terminal has commenced its operation from 26-06-2003 by
Visakha Container Terminal Pvt. Ltd. by An SPV institute of a joint venture company
between the prestigious Dubai International Port and M/s. JM Baxi & Co., Mumbai. The
terminal is the deepest terminal of the country with a facility to accommodate main line
vessels up to 15 M draft. The terminal has a dedicated rail facility to handle full rake of 45
wagons. The terminal has a potential to handle 5 lakh TEU in future years and is ideally
situated to serve as “Container Hub Port" on the East Coast of India.

Intermediate port is one which handles not less than 1500 tones of cargo annually and is
important from the view point of passengers’ traffic defense and customers. Example
Kakinada, a port handling less than 1500 tones of cargo is termed as minor.
Example: Machalipatnam, Bheemunipatnam etc.
The major ports are governed by the major port trust act 1963 and the Indian ports act,
1908 and the rules and regulations framed under. Each major port has a board of trustees
representing various interests connected with the port operations and the shipping industry.
The chairman of each port trust is appointed by the central government. Besides, chairman,
there are representatives of customers, railways, defense, state owner ships etc.
All the members of the board other than the chairman and deputy chairman are part
time members. The central government provides resources for the modernization and
development of major ports. Port mainly derives their revenues from cargo handled in their

27
port areas charges on the ships visiting their areas and other related charges.
The main sources of revenue from cargo traffic are:
Wharf age / handling fees, cargo related charges.
crane hire charges
rental from warehouses
demurrage charges
Charges for providing rail & other transport, for the cargo Government and providing water
facilities for the visiting ships.

Similarly the main sources of revenue from ship traffic are:

Port Dues
Pilotage
Birth Hire
Survey & Measuring fees
Ship Repairs in dock areas, charges for water supply.
To carry out various activities, each port engages different types of labour. The
workers employed by the port authorities and generally known as “port workers” and they
work on shore. For work on the board the ship workers registered with labour board known
as DLB
Thus in all major ports there will be large number of work force, based equipment
etc., giving a color of complex organization requiring high degree of skill, co-ordination,
cordial relation etc.

28
The dock workers (Regulation of employment) Act, 1948(SEC 9 of 1948)

Definition:
In this act, unless there is anything resurgent in subject or context.
 “BOARD” means a C.H.D LABOUR Board established under section, 5 (A).
 “CARGO” includes anything carried or to be carried in a ship or other vessel.
 “CARGO HANDLING DIVISION “means a person employed in the vicinity of any
port of work in connected with loading, movement or storage of Cargoes or work in
connection with the preparation of ships or other vessels For the Receipt of
discharged of cargoes (or) leaving port.
Private Sector Participation:

In keeping with general policy of liberalization and globalization of economy of the

Government of India, the Port sector has been thrown open to private sector participation.
Private Sector participation in provision of port facilities at various major ports is envisaged
in a big way. There is no legal bar to private sector participation in port facilities as per the
provisions of the existing Major Port Trusts Act, 1963. In order to handle the increase in the
sea-borne traffic on account of increase in foreign and coastal trade, major expansion is
required in the port infrastructure sector in the country and this will need mobilization of
substantial resources. Hence, the opening up of the port sector for privatization. It is expected
that privatization would also improve the efficiency, productivity and quality of services and
also bring competitiveness in port services. It is also expected that the private sector
participation would help bringing in latest technology and improved management techniques.
It is felt necessary to encourage the private sector participation in enhancing port capabilities
and also in modernization of port equipment.

29
 COMPANY PROFILE

CARGO HANDLING DIVISON

(Erstwhile Visakhapatnam Dock Labour Board)

INTRODUCTION:
India is situated at the head of the Indian Ocean with a coast-line of about 3535 miles,
and occupies an important place in the maritime world. There are about 232 ports in India, of
which 12 are major ports, 14 intermediary ports, 132 minor ports and 76 sub-ports,
Visakhapatnam Port is one of the 12 major Ports in India. The port lies on the eastern
coast of India and midway on the rail route between Kolkata to north-east and Chennai to the
south. It is situated at the mount of river “Magadri Gedda”, and adjoining the “Dolphin
Nose” a Hill nearby projecting into the Bay of Bengal. This Port has been so laid out as to
have the advantage of natural protection offered by this Hill to the ships carrying cargoes
from cyclones which are usual on this coast during the North east monsoon. And, another
favorable and important factor to this Port is a low tidal range. Thus, the Visakhapatnam Port
is considered as a natural port, attracting the many cargo ships for shipments etc.
Visakhapatnam Port started functioning during the year 1933 and later formed into a
Trust under Major Port Trusts Act. In Visakhapatnam Port, there are two major cargo
handling autonomous bodies, viz., Visakhapatnam Port Trust & Visakhapatnam Dock Labour
Board (VDLB). The Visakhapatnam Dock Labour Board was established during 1961 under
Dock Workers (Regulation of Employment) Act 1948.

CONSTITUTION OF VDLB:
When the Dock Labour Board was not formed, the workers were supplied by the
middlemen to the stevedores as and when required. There was no proper basis of recruiting
workers to work in major parts. Their earnings depended upon the mercy of the intermediary
agencies. There was no proper basis for determining the wage rate. The demand for the
dock workers depended upon the arrival and departure of vessels, the size of cargo and
seasonal cyclical fluctuations.
No regularity of employment and earnings coupled with the ignorance of workers,
made the intermediate agencies to exploit the Labour. They were paid less and made to

30
perform more work. With the objective of regularizing the employment process and
providing fair earnings to the Labour working in Visakhapatnam port, Visakhapatnam Dock
Labour Worker (Regulation of Employment Scheme) was formed on 30-11-1959 by the
Government of India.
The Dock Labour Board maintains a list of employers who carry-out the work of
recruiting Dockworkers. The employers have to pay some amount towards the deposit,
depending up on the volume of workers carried by them. There are 45 employers under
registered scheme, and 66 employers under unregistered scheme 31-12-2001.
The Dock Labour Board is directly under the administrative control of the
Government of India. New Delhi. The Visakhapatnam Dock Labour Board is tripartite
body, which has representatives from Government side, representatives from employers
(Stevedores) and representatives from trade unions. Under the Dock Workers Regulation
Employment Act of 1959, the registered scheme was established and under the Dock
Workers Regulation Act of 1961, the unregistered scheme was established.
The Dock Labour Board collects levy from the employers for supplying the Human
Resources to them. The levy rate is usually fixed by the government of India out of this levy
the Dock Labour Board pays the wages to the workers and carries out the welfare
programmers for the dock workers. The levy rages are subject to change according to
Government decisions.
The main function of the board is to supply man-power to the employers of both the
schemes for cargo handling operations. Basically, it is labor intensive organization. About,
1500 employees / workers are working in the Board. There is a Board which comprises 12
members having equal representation from Central Government, the Dock workers and the
employers of shipping companies. The Chairman of the Board is the Chief Executive of the
Board. Deputy Chairman is whole time officer of the Board, who looks after the day to day
administration, and the Board is under the control of Ministry of shipping, Government of
India, New Delhi.

BOARD MEMBERS:
 Four Members representing central government
 Four members representing dock workers
 Four members representing employers of dock workers / shipping companies.
The representative from the government is appointed by the government, and an I.A.S

31
officer is appointed as the Chairman. They shall be whole time or part time Deputy
Chairman and also appointed by the central government.
BACKGROUND:
Before the formation of Dock Labour Boards, in all the major ports, the workers were
directly under the contract of the middlemen, who supplied the workers to stevedores as per
the needs. There was neither regularity in employment nor in the earnings of the Dock
workers. The demand for the workers was mostly dependent on the highly fluctuating traffic
of the cargo vessels. The exploitation of the workers was at the maximum level in those
days. The Royal Commission on labour which was constituted by the Government, reviewing
the deplorable service conditions of Dock labour, stressed in its report submitted to the
Government of India in 1931, the need to ensure the regularity of employment for Dock
workers and also the necessity to ensure adequate number of Dock workers available to load
and unload the vessels.
It was also recommended to ensure that the distribution of work depends on a system
rather than the wish of the middlemen, so that the workers get equal share. Basing on the
recommendations of the royal commission on labour, the Government of India has taken the
legislative action and passed the Dock workers (regulation of employment) Act of 1948, to
regularize the employment for the Dock workers and to improve the service condition of the
Dock workers.
In view of the recommendation of Royal Commission on a draft scheme was prepared
in 1939, but could not take off due to the employment act which was enacted by the
Government of India in 1948. It was based on the Dock workers (regulation of employment)
Act,1946, which clearly states that the Dock workers is a person employed in or in vicinity of
any Government worker, in connection with loading, unloading movements or storage of
cargoes. Cargoes have been defined as any thing carried or to be carried in a ship or in other
vessels. The power conferred by subsection A (2) of section 5 of the Dock Workers Act of
1948 which was exercised by the Central Government and Visakhapatnam dock Labour
Board came in to effect from 5th June 1961.

Merger of Cargo Handling Division

(Erstwhile Visakhapatnam Dock Labour Board) with Visakhapatnam Port Trust
Various Committees had gone into the working practices in handling dock work and
made recommendations for rationalization of the existing system. While dealing with the

32
merger issue, it is pertinent to note that earlier studies highlighted the need for a single cargo-
handling agency or a separate cargo handling department in the Port Trust to be entrusted
with all the cargo handling functions in the Dock area.
As per the Government directions and to gear up to changing trends in the Indian
economy, the Ports which act as an important link in the transport system, have started
initiating certain measures, which would make its services more competitive and productive.
One such measure is making provision for the merging DLBs with the Port Trusts.
The Government informed that the Dock Workers (Regulation of Employment)
(Inapplicability to Major Ports Bill) 1997 to provide for inapplicability of the Dock Workers
(Regulation of Employment) Act, 1948 to the dock workers of Major Port Trusts and matters
connected therewith are incidental there to was passed by the Rajya Sabha and Lok Sabha.
The Government of India communicated to initiate necessary steps for eventual merger in
terms of provisions of this Bill and the Ministry may be kept informed the developments
from time to time.
There are 12 Major Ports existed in India. They are Calcutta, Para deep on the
Eastern Region, Visakhapatnam, Chennai, Tuticorin, Cochin, New Mangalore on the
Southern Region, Jawaharlal Nehru Port, Mumbai, Murmagoa Port and Kandla on the
Western Region and there were 7 Dock Labour Boards and presently only 2 Dock Labour
Boards i.e. Cargo Handling Division (Erstwhile Visakhapatnam Dock Labour Board) and
Kolkata Dock Labour Board are in existence, the rest of 5 Dock Labour Boards i.e. Mumbai
Dock Labour Board, Chennai Dock Labour Board, Cochin Dock Labour Board, Murmogoa
Dock Labour Board and Kandla Dock Labour Board were merged with their respective Port
Trusts.
As far as Cargo Handling Division (Erstwhile Visakhapatnam Dock Labour Board) is
concerned, there are three unions in existence, and for all practical purposes, these three
unions played vital role in maintaining harmonious industrial relations in the Port. As
regards the merger of Erstwhile Visakhapatnam Dock Labour Board with Visakhapatnam
Port Trust is concerned, several discussions were held with the unions on a variety of issues,
such as, service conditions, financial matters, welfare activities and issues related to cargo
handling operations.
The Ministry of Shipping, Road Transport & Highways have communicated its
approval on the draft Terms of Settlement with certain conditions and making minor
corrections. A Memorandum of Settlement under Section 12 (3) of the Industrial Dispute
Act, 1947 was arrived before the Asst Commissioner of Labour (Central), Visakhapatnam

33
with the Management of Visakhapatnam Port Trust, Visakhapatnam Dock Labour Board and
Workmen represented by its Unions for eventual merger of Visakhapatnam Dock Labour
Board with Visakhapatnam Port Trust. The Government of India had issued a notification
dated 26-09-2008 stating that the provisions of the Dock Workers (Regulation of
Employment) Act, 1948 (9 of 1948) shall cease to have effect in relation to that major port
with effect from 26th September, 2008. Consequent to the issue of notification by the
Government of India, the Visakhapatnam Dock Labour Board has been merged with the
Visakhapatnam Port Trust wef 26th September, 2008 and re-designated as “Cargo Handling
Division” under the control of the Traffic Manager, Visakhapatnam Port Trust.
Now, this Visakhapatnam Dock Labour Board ceased to be in existence with its
merger with Visakhapatnam Port Trust during Sep, 2008, thereby all the functions hitherto
carried out by the erstwhile VDLB have been carried out by this Cargo Handling Division of
VPT.

Objectives of Cargo Handling Division:

 To ensure adequate number of workers available for the efficient performance of
cargo handling work.
 To ensure that dock Workers receive guaranteed minimum wages as per provisions.
 To ensure regularity of employment to dock workers.
 To provide welfare amenities and medical facilities to workers.
 To provide facilities like holiday wages, leave wages, LTC, retirement benefits like
pension, provident fund and gratuity.
 To take care of the health and safety of workers.

Functions of the Cargo Handling Division:

 The C.H.D. would take such measures, as it may deem necessary for furthering the
specified objectives. Such functions or measures include the following:-
 Measuring the adequate supply for full and proper utilization of the Dock labour, for
the purpose of facilitating rapid and economic turn round of vessels and the speedy
transit of the cargoes through this Port.
 Regulating the recruitment of men for carrying out the dock work and allocation of
dock workers to registered employers.
 Determining and reviewing the number of dock workers, from time to time, on the

34
 registers or records, by increasing or decreasing of work force to the requirement.
 Keeping and maintaining and employers register. Entering or re-entering the names of
any dock employer and where circumstance so require, removing the employer from
such register or record the name of the registered employer, either at his own
request or in accordance with existing provisions.
 .Keeping, adjusting and maintaining, from time to time, such registers or records as
may be necessary, for dock workers, including the records of dock workers
temporarily not available and whose absence has been approved by the
administration.
 Grouping or re-grouping of all dock workers into such groups as was determined and
reviewing thereafter.
 Making provisions for the training and welfare of the dock workers.
 Levying and recovering from the registered employers.
 Making provisions for the health and safety measures in the places where dock
workers are employed.

Workers Participation in Cargo Handling Division

(Erstwhile Visakhapatnam Dock Labour Board)
While considering Cargo Handling Division (Erstwhile Visakhapatnam Dock Labour
Board) as the model employer the above perspectives the role of employee in the
management can be analyzed and examined. The VDLB was constituted in 1959 under the
Dock Workers (Regulation of employment) Act, 1948.
Workers Participation in Management is one of the major aspects of national
programme towards betterment of the organization. In VCHD in every decision making
situation the participation both union and management are involved and it was implemented.
So management was providing quality output and at the same time employee gains more
benefits with out any industrial disputes. In every aspect whether it is decision making part
or ideas and suggestions for improvement point of view the management taking the
consideration of workers.
To maintain amicable relations and provide welfare and recreation facilities Cargo
Handling Division (Erstwhile Visakhapatnam Dock Labour Board) has formed several
committees as detailed below.
They are:-

35
  Safety Committee
 Welfare Committee
 Canteen Committee
 Cultural Association
 Sports Council
 Quarters Committee
 VDLB Educational Society
 Cooperative Society

Cargo Handling & Booking of Workers:
Before a vessel enters into the port, the Government calls for tenders from the
shipping agents, clearing & forwarding agents, for loading or unloading of various cargoes
from the ships / vessels in a port. After finalizing these tenders, the government allots the
cargo handling work to the eligible shipping agents or the stevedores.
On receipt of the cargo handling order, the stevedore or shipping agent approach the
Cargo Handling Division (C H D) of the Port for the required labour force to handle the
cargo, by indenting the workers with the call stand of the C.H.D. Then the concerned staff in
the call stands, after due and proper planning, allot the required workers to the indenting
employers for the handling of cargoes. In the event of any shortage of workers, the C.H.D.
procures the remaining workers from cargo handling labour pool of Vishapatnam port trust
and the Cargo Handling Private Workers Pool.
At every port there is a call stand for workers maintained by its C.H.D. This looks
after the engagement of workers to the various berths for loading and unloading operations in
all 3 shifts in a day. The call stand staff also arranges transport to the workers to their allotted
work spots. The C.H.D. provide welfare facilities to the workers as per the Factories Act,
1948 which include place for rest, recreation , canteen, drying and storing of clothes etc., in
the call stand premises.

36
The call stand is manned by –

SUPERVISOR

ASSISTANT SUPERVISOR

. SENIOR INSPECTOR

BOOKING STAFF

DOCK SUPERRINTENDENT

The above call stand staff supervises the handling operations of the workers in the
port. The procedure of booking of workers and allotment of work-spots to the various
employers/stevedores in the Cargo Handling Division of Visakhapatnam was earlier done
manually, but, the entire system was automated and now computerized.
SERVICES RENDERED
The Cargo Handling Division of Visakhapatnam Port Trust, being a non-manufacturing
organization, the services rendered by it include the supply of dock labour to the concern
stevedores for efficient loading and unloading of various cargoes into ships / vessels for
exports or imports:

Imports:
Different types of ores.
 Bulk cargoes.
 General cargoes.
 Food grains.
 Heavy lifts on Deck.

37
  Anthracite Coal.
 Zinc ignites.
 Alumina Powder Bags.
 Gas Coke.
 Ammonium Nitrate.
 Petroleum Coke.
 DBM Bags.
 Iron ore fines.

Exports:
 Rice in bags.
 Wheat in bags.
 Sugar in bags.
 Manganese Ore.
 Ferro Chrome.
 Thermal Coal.
 Pig Iron.
 General Cargo.
 Cement in bags.
 Iron & Steel.
 Granite blocks.
 Soya Bean Meal.
 Roofing Sheets.
 Timber Logs.
 H.C.F. Chrome.

Categorization of Cargo Handling Division

The Visakhapatnam Port Trust comprises various Departments. One such
department is Traffic Department and the Cargo Handling Division comes under this
Department, headed by the Traffic Manager. The Traffic Manager controls the managerial
and working staff, and in charge for various cargo handling operations in the VPT.

38
WORKING STAFF:
As per the dock workers employment and regulation Act, 1948 employment
registration schemes have been prepared and thus in the year 1959 and 1968 two schemes
have come in to practice. They are
The Registered scheme
The UN-Registered scheme

Registered Scheme:
The number of workers in the reserve pool under Visakhapatnam Dock Workers
(Regulation of Employment) Scheme, 1959, which were 1014 as on 31-12.2001. The
Registered Scheme workers direct the loading and unloading of cargo from the ships.

Un-Registered Scheme:
The number of workers under Visakhapatnam Dock Workers (Regulation of
Employment) Scheme, 1968, which were 74 workers as on 01-04-2004 (inclusive of casuals),
increased by 31-03-2004. During the year 45 mazdoors transferred from Registered Scheme,
2 workers retired on attaining age of superammuation, 2 workers expired

DUTIES AND RESPONSIBILITIES

Secretary:
Secretary of the Cargo Handling Division is responsible for advising the Traffic
manager on matters pertaining to procedure and for arranging general, statutory and special
meetings of the Board; He shall be responsible for compilation of the Board’s annual
administration report placing the same for Board’s approval and submission to the
Government in due time. He shall be in general control of the Board’s Secretariat. He shall
deal with matters relating to Industrial Relations. He shall be responsible for compilation,
maintenance and furnishing of all labor statistics. He shall deal with cases of registration and
listing of employers. He shall assist the Traffic manager and carry out the functions delegated
to him by the traffic manager. He shall perform such other duties as may be entrusted to him
from time to time by the Chairman or the Traffic manager with the approval of the Chairman.

39
Senior Labour Officer:
Senior Labour Officer shall coordinate the functions of the Labour Officers appointed
under the two schemes of the Cargo Handling Division. He shall advise the Administrative
Bodies on all labor management matters. He shall assist the traffic manager in discharging of
his duties as the Administrative Body, Unregistered Scheme. He shall be watchful about the
labor situation and report to the Chairman/ traffic manager Chairman/Administrative Bodies
about any signs of labor unrest in proper time. He shall visit the work spots to settle disputes
that arise between the employers and the workers or among the workers and ensure that the
workers comply with the provisions of the scheme and rules and regulations of the Board. He
shall perform such other duties as may be entrusted to him by the Chairman or the Deputy
Chairman with the approval of the Chairman.
Administrative Officer:
Administrative Officer shall be in charge of all purchases and stores for the Board and
Administrative Bodies. He shall deal with all matters concerning lands, buildings and other
properties and assets of the Board. He shall be in charge of all vehicles and communication
systems of the Board. He shall be in charge of security of all properties of the Board. He shall
be the authority for allotment of Board’s quarters. He shall assist the Deputy Chairman in his
functions as Estate Officer of the Board He shall deal with all legal matters concerning the
Board. He shall deal with matters relating to organization & methods and Work Study
including control of records. He shall attend to matters relating to public relations. He shall
perform any other functions that may be entrusted to him by the Chairman with the approval
of the Chairman.

Chief Accounts Officer:

Chief Accounts Officer shall maintain accounts of General Fund, Welfare Fund,
Provident Fund, Gratuity Fund, Pension Fund, and Family Security Scheme Fund. He shall
advise the Board/Chairman son investments and financial matters. He shall prepare budget
for the funds maintained by the Board and scrutinizes the budget of the Registered Scheme
and the Unregistered Scheme. He shall exercise budget control in all the Divisions of the
Board and Administrative Bodies He shall conduct internal audit of the accounts of the
Board and Administrative Bodies. He shall conduct periodical verification of assets and
stores in all Divisions of the Board and Administrative Bodies. He shall be in charge of all
financial transactions will regard to the funds operated by the Board. He shall deal with

40
matters concerning audit of accounts maintained by the Board and Administrative Bodies. He
shall coordinate the accounts work in the Registered Scheme, the Unregistered Scheme and
the Board’s Division. He shall perform any other function that may be entrusted by the
Chairman or the Deputy Chairman with approval of the Chairman.

Personnel Officer:
Personnel Officer shall carry out the duties specifically laid down under clause 44 of
the Registered Scheme and clause 32 of the Unregistered Scheme. He shall deal with all
personnel matters, via, recruitment, training (including study leave), grievances, promotions,
applications for outside employment, retirements, maintenance of service records of workers
and staff of the Board and Administrative Bodies. He shall assist the Deputy Chairman in
processing the disciplinary cases reported by the Labour Officer and also in processing of
appeals of workers against the orders of the Labour Officers. He shall also assist the Deputy
Chairman in dealing with disciplinary cases against the employees of the Board. He shall
perform such other duties as may be entrusted to him by the Chairman or the Deputy
Chairman with the approval of the Chairman.

Deputy Chief Medical Officer:

Presently, the post of the Deputy Chief Medical Officer is being operated against the
post of the Chief Medical Officer. Therefore, the duties and responsibilities of the Chief
Medical Officer are being looked after by the Deputy Chief Medical Officer. The Deputy
Chief Medical Officer is the over all charge of the medical services – preventive, promotive
and curative and is responsible for the smooth running of the Medical Department. He shall
the administrative head of the Medical Division of the Board and make periodical/surprises
checks/visits of the Hospital and Branch Dispensary. He shall be responsible for the
Sanitary Section and proper sanitation of the Board’s Office, Call stands and Housing Colony
at Kailasapuram. He shall visit those places twice in a week for inspection and report to the
Chief Medical Officer. He shall deal with the Unions in matters related to hospital working,
under the guidance of the Deputy Chairman. He shall scrutinize the medical reimbursement
bills and recommend for sanction. He shall approve issues of special /specified drugs. He
shall be the Chairman/ Convener of Medical Boards for examination of cases for retirement
on medical grounds. He shall examine all cases of age assessment, cases for first
appointment in DLB medically (pre-employment medical examination), cases of retired
employees/workers for commutation of pension, cases referred for medical examination for

41
loss in earning capacity (Workmen’s Compensation Act), case requiring light job and give his
opinion /report/recommendations. He shall recommend cases requiring referrals to local
Government Hospitals, local private Hospitals and out-station Hospitals. He shall be
responsible for the procurement of drugs and equipment recommended by the Drugs
Committee and Specialists attending the Board’s Hospital. He shall exercise budgetary
control and shall be responsible for the imp rest cash and sign all the vouchers. He shall
attend to any other duties as may be assigned by the Chairman or the traffic manager with the
approval of the Chairman.

Labour Welfare Officer:

Labour Welfare Officer shall ascertain what further welfare facilities are needed, how
best they can be provided and make suggestions for their establishment. He shall make sure
that the available welfare facilities provided under the Regulation or otherwise are being
properly maintained and utilized. He shall ensure adequate supervision of the amenities
provided, especially as regards canteens, rest rooms, washing and toilet facilities and drinking
water. He shall examine grievances voiced by the dock workers and employees in respect of
welfare facilities and other amenities.

Asst Secretary:
Asst Secretary shall deal with all establishment matters like salary bills, annual
increments, conveyance allowance, TA & DA, LTC claims, advances, recovery of advances,
leaving including leave encashment, conveyance allowance. He shall be in charge of Board’s
Library. He shall perform such other functions that may be entrusted to him by the Chairman
or the Deputy Chairman with the approval of the Chairman.

Asst. Executive Engineer:

Asst Executive Engineer shall be in charge of maintenance of Colony at Kailasapuram
including amenity buildings like Branch Dispensary, Junior College, High School, Recreation
Centre, Kalyanamandapam and also the maintenance of Office Building, Call stands and
Hospital. He shall be responsible for arranging regular water supply for all the above
Buildings. He shall be responsible for maintenance of electrical fittings of the above
Buildings and street lighting in the Colony. He shall supervise all construction works both
capital and minor works. He shall be responsible for procurement of cement, steel and other
Engineering Stores and capital works and maintenance works and also be the over all in

42
charge of the Engineering Section. He shall prepare estimates and detailed drawings for the
works. He shall prepare Tender Schedules/Agreements. He shall assist the Chief Accounts
Officer in preparation of budget estimates/ revised estimates pertaining to capital works and
maintenance works. He shall process contract bills after check measurement and effecting
recovery for the stores issued by the Department to Contractors.

Accounts Officer:
Accounts Officer shall be in charge of all financial transactions of Funds operated by
the Administrative Body, Registered Scheme and maintain accounts of the Funds. He shall be
responsible for collection of Wages (including piece-rate wages) levy and other dues from
employees in proper time. He shall advise on investments and financial matters of the
Registered Scheme. He shall be responsible for wages and other payments to the workers in
proper time and for collection of advances and other dues from them as per recovery advices.
He shall prepare budget for the funds maintained by the Administrative Body, Registered
Scheme. He shall deal with matters concerning audit of accounts maintained by the
Administrative Body. H shall be responsible for proper assessment of levy contributions,
dues payable to the Administrative Body and collection thereof. He shall be responsible for
submission of monthly and annual statistics to the Board. He shall perform any other
functions that may be entrusted by the Chairman or the traffic manager or the Administrative
Body, Registered Scheme, with the approval of the Chairman.

Labour Officer:
The Labour Officer shall be in charge of allocation of workers. He shall visit the work
spots to see that the work goes on efficiently. He shall settle disputes that arise between the
employers and the workers or among the workers and ensure that the workers comply with
the provisions of the Scheme and rules and regulations of the Board. He shall be sanctioning
authority for casual leave/earned leave/sick leave and processing of applications for
advances, etc to the workers. He shall deal with all disciplinary matters. He shall be
responsible for submission of monthly and annual statistics relating to employment of
workers. He shall advise the Administrative Body on all labor management matters through
the Senior Labour Officer. He shall be in charge and submit reports to the Deputy Chairman
about any signs of Labour unrest in proper time. He shall perform such other duties as may be
entrusted to him by the Chairman or the traffic manager with the approval of the Chairman.

43
Medical Officers:
The Medical Officer shall attend to shift duties in Causality to render out-
patient/emergency treatment. He / She shall also work in General Shift when posted either at
Main Hospital or Kailasapuram Dispensary. He/She shall make rounds of various wards
during 2nd and 3rd shifts and attend to inpatients. He/She shall attend to any other duties as
may be assigned to him/her by the Chairman or the Chief Medical Officer with the approval
of the Chairman.

Hindi Officer:
The Hindi Officer shall be responsible for implementation of Section 3 (3) of Official
Language Act. She shall conduct Official Language Implementation Committee Meetings for
every quarter. She shall be responsible for Hindi Training Programme of Officers and
Employees. She shall be responsible for conducting Hindi work-shops. She shall perform any
other work that may be entrusted by the Chairman and with the approval of the Chairman.

Assistant Director (Systems):

Asst Director (Systems) shall be responsible to ensure convenient methods for
adoption of the computer media for wages/pay roll calculations and billing in consultation
with the Labour Officers and Accounts Officers. He shall be responsible to plan and propose
additions/ alterations for the existing system for better performance stage by stage. He shall
be responsible to plan improvement to the existing system by creating a computer section. He
shall be responsible to the proper implementation of the systems and generate required
output. He shall be responsible to look after the proper upkeep and maintenance of all aspects
of the computer Centre. He shall be responsible for procuring, storing, issue and usage of
computer stationery in consultation with the Administrative Officer. He shall be responsible
to propose such additional configurations as may be feasible for achieving better and greater
satisfaction of the users divisions. He shall also attend to such other duties as may be
entrusted by the Chairman and with the approval of the Chairman.

Duties of safety officer:

 To advise the concerned department in planning and organizing measures necessary
for the effective control of personal injuries;

44
  To advise on safety aspects in all dock work and to carry out detailed job safety
studies of selected dock work.
 To check and evaluate the effectiveness of the action taken or proposed to be taken to
prevent personal injuries.
 To advise the purchasing and stores departments in ensuring high quality and
availability of personal protective equipment.

WORK ACTIVITIES:
Port and Docks are services industries and play on important role in the economy of
a country. They are the gateways of export and import of cargo. Handling of cargo
is the main activity that is carried out through port and docks. Beside there are a large
number of ancillary and supportive activities that go on simultaneously with cargo
handling with activities. There is dredging, maintenance of navigational channels, berthing
of ships that comes into the ports, piloting them for the high sea, maintains and repairing of
ships, signaling them. Thus ports and dock are center of multifarious activities and provide
employment to a large number of people. The dock labor board, Visakhapatnam is service
industry. The nature of work performed here is nothing but handling of cargo. The CHD
has two schemes namely RS and URS, both for workers and stevedores. It applies gangs of
workers to stevedores’ i.e. Agents who under take the operation of loading and unloading
of cargo.

As on 30-04-2009

REGISTERED SCHEME STRENGTH

Sr. Tally clerks 02
Tally clerks 78
Winch drivers 145
Tindals 57
T/signal man 98
Mazdoors 519
TOTAL 899

UN-REGISTERED SCHEME STRENGTH

Masteries 71
Light job 03

45
Tindals 26
Woman sweepers 03
Casual Mazdoors 32
Casual Mazdoors(daily wage) 315
TOTAL 450

STAFF STRENGTH
Class-I 11
Class-II 06
Class-III 112
Class-IV 64
Total 193

Registered scheme workers 899

Unregistered scheme workers 450
Total workers strength 1349
Total staff strength 194
TOTAL 1543

Managerial Staff

Class 1:
 Secretary
 Administrative Officer
 Assistant Secretary
 Senior Labor Officer
 Personal Officer
 Labor Welfare Officer
 Chief Accounts Officer
 Chief Medical Officer
 Deputy Chief Medical Officer
 Accounts Officer(R)
 Assistant Executive Engineer

Class 2:

46
  Accounts Officer (L)
 Labor Officer
 Assistant Director (Systems)
 Hindi Officer
 Assistant Engineer
 Stores Officer

Class 3:
 Office Super dent
 Head Assistant /A.W.O.
 Senior Assistant
 Senior Investigator Junior Assistant
 Clerk
 Junior Clerk
 Vigilance Inspector
 Telephone Operator
 Senior Driver
 Typist-Cum-Telephone Operator
 I.O.W. Gr- ii
 Overseer
 Fitter
 Mason Gr- II
 Senior Staff Nurse
 Senior Pharmacist

Class 4:
 Mason Gr- II
 Pump Attendant
 Khalasi
 Gardener
 Record Sorter

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  Messenger
 Naik
 Senior Watch Man
 Driver
 Gesture Operator
 F.N.O.
 Ward Boy
 Sanitary Zamedar
 Sanitary Khalasi

Conclusion:
On the recommendations of the Royal Commission on Labour submitted to the
Government in 1931, the government of India has taken the legislative action and passed the
Dock Workers (Regulation of Employment) Act, 1948. The Visakhapatnam Dock Labour
Board was constituted under the Dock Workers (Regulation of Employment) Act, 1948.
Under the said act, two schemes viz., The Visakhapatnam Dock Workers (Regulation of
Employment) Scheme, 1959 and The Visakhapatnam Unregistered Dock Workers
(Regulation of Employment) Scheme, 1968 were formulated.
The Visakhapatnam Dock Labour Board is intended to ensure great regularity of
employment for Dock workers and to ensure that an adequate number of workers are
available for the efficient performance of the Dock workers. VDLB being a non-
manufacturing organization, the services rendered by it are, supply of labour to stevedores for
loading and unloading of cargo for exports and import. The Welfare amenities to the
employees & workers are extended to a greater extent and meeting all the statutory and non-
statutory requirements. VDLB is having very good environment in these labour management
relations because it has laid down all basic policies and procedures in a constructive attitude
for maintaining harmonious industrial relations which is very important to reach the target of
production and productivity of the organization.
In the year 1991, the Government has introduced new Industrial Policy in which the
Port sector was considered and one of the measures taken by the Government is to merge
Dock Labour Boards with the respective Port Trusts. Accordingly, five Dock Labour Boards
have been merged with respective Port Trusts and there are two Dock Labour Boards
remaining to be merged with the respective Port Trusts viz., Visakhapatnam Dock Labour

48
Board and Calcutta Dock Labour Board. The Ministry of Shipping, Road Transport &
Highways have communicated its approval on the draft Terms of Settlement with certain
conditions and making minor corrections. A Memorandum of Settlement under Section 12
(3) of the Industrial Dispute Act, 1947 was arrived before the Asst Commissioner of Labour
(Central), Visakhapatnam with the Management of Visakhapatnam Port Trust,
Visakhapatnam Dock Labour Board and Workmen represented by its Unions for eventual
merger of Visakhapatnam Dock Labour Board with Visakhapatnam Port Trust. The
Government of India had issued a notification dated 26-09-2008 stating that the provisions of
the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948) shall cease to have
effect in relation to that major port with effect from 26th September, 2008. Consequent to
the issue of notification by the Government of India, the Visakhapatnam Dock Labour Board
has been merged with the Visakhapatnam Port Trust wef 26th September, 2008 and re-
designated as “Cargo Handling Division” under the control of the Traffic Manager,
Visakhapatnam Port Trust.

A Theoretical Frame Work of Budget & Budgetary Control

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Meaning& Need for Budget:
A budget is a plan for coordinating the various operations of the business expressed in
financial terms. It is a detailed schedule of prepared combination of various factors of
production which the management deems to be most profitable for the ensuing period.

DEFINITION:
Budget is defined as “A financial and /or quantitative statement, prepared and
approved prior to a defined period of time, of the policy to be pursued during that period for
the purpose of attaining a given objective”. It may include income, expenditure and capital.
An analysis of this definition reveals the following essentials of a budget: The budget is
monitory and/or quantitative statement of that policy. A budget is prepared prior to a defined
period of time. It is prepared for the definite future period of time. The policy to be followed
to attain the given objectives must be laid before the budget is prepared. Thus, a budget fixes
a target in terms of rupees or quantities against which the actual performance is measured. A
budget is a document which is closely related to both the management function as well as the
accounting of an organization.
Different Types of Budgets
Functional Budgets
A functional budget is a budget which relates to any of the functions of an
undertaking. The functional budgets commonly used are sales budget, production budget,
administration cost budget, capital expenditure budget, research &development cost budget,
cash budget etc.

Sales Budget
Sales being the principal budget factor, sales budget are the most important budget
and form the basis on which all the other budgets are built up. This budget is a forecast of
quantities and values of sales to be achieved in a budget period. Every effort should be made
to ensure that its figures are as accurate as possible because this is usually the starting budget
(sales being limiting factor on which all the other budgets are built up). The sales manager
should be made directly responsible for the preparation and execution of this budget. In the
preparation of the sales budget, the sales manager should take into consideration the
following factors.

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Past sales figures and trends:
The compiler of the sales budget should be assisted by graphs recording sales of the
previous year and the general sales trend (upward and downward) should be noticed from the
graphs. The record of previous year’s sales is the most reliable basis as to future sales as the
past performance is based on actual business conditions. But in addition to the past sales,
other factors affecting future sales e.g., seasonal fluctuations, growth of market, trade cycle
etc., should be considered in the preparation of the sales budget.

Salesmen’s estimates:
In preparing the sales budget, the sales manager should consider the estimates of sales
received from salesmen because they can make more accurate estimates being in direct
contact with the customers. However, it should be seen that salesmen’s estimates should
neither be over optimistic nor too conservative.

Plant Capacity:
The budget should be with in the plant capacity available and should ensure proper
utilization of plant facilities. Proposed plant extension should be allowed for in the
preparation of the sales budget.

Availability of raw material and other supplies:

Adequate supply of raw materials and other supplies should be ensured before preparing the
sales estimates. Sales estimates should be adjusted according to the availability of raw
materials if the raw materials are in short supply.

General trade prospects:

The profitability of the sales going up or down depends on the general trade prospects. In this
connection valuation information may be gathered from financial papers and magazines such
as Economic Times, The Financial Express, The Commerce, etc.

Seasonal fluctuations:
In preparation of the sales budget, seasonal fluctuations should be considered because sales
are effected by these fluctuations. In order to have an even flow of production, efforts should
be made to minimize the effects of seasonal fluctuations on sales by giving special

51
concessions or added inducements during the off seasons. The sales manager after taking into
consideration the above factors, should prepare the sales budget in terms of quantities and
amounts and the sales estimates must be analyzed for products, period and territories. The
sales budget should include an estimate of selling and distribution costs in addition to an
estimate of the total proceeds.

Sales Forecast & Sales Budget

A sales forecast may be just a guess of sales without taking into consideration
production capacity and may lack any objective to control the actual performance. On the
other hand estimate of the sales given in the sales budget is not a merge guess, it is based on
the plant capacity, availability of material, labour and working capital and many other
considerations. It is capable of being achieved, so it is amenable to control.

Production Budget
Production budget is a forecast of the total output of the whole organization broke
down into estimates of output of each type of product with a scheduling operations (by weeks
and months) to be performed and a forecast of the closing finished stock. This budget may be
expressed in quantitative (weight, units etc) or financial (rupees) units or both. This budget is
prepared after taking into consideration the estimated opening stock, the estimated sales and
the desired closing finished stock of each product. The following factors are considered in
preparing the production budget. The material, labour and plant requirements should
ascertain to have the desired production to meet the sales programme. The sales and the
production budget are inter-dependent because production budget is governed by the sales
budget is largely determined by the production capacity and by production cost.

Plant Utilization Budget

This budget lays down the requirements of plant capacity to carry out the production
as per the production programme. This budget is expressed in terms of convenient physical
units as weight or number of products or working hours. The main functions of the plant
utilization budget are. It will show the machine load in each department during the budget
period. It will indicate the overloading on some departments, machine or group of machines
and alternative courses of actions as working overtime, off loading, procurement or
expansion of plants, sub-contracting etc., can be taken. Idle capacity in some departments

52
may be utilized by making efforts to increase the demand for the products by providing after
sales services, conducting advertisement campaign, reducing prices, introducing lucky prize
coupon, recruiting efficient sales staff service etc.

Cost of Production Budget

After determining the volume of output the cost of procuring the output must be
obtained by preparing a cost of production budget. This budget is an estimate of cost of
output planned for a budget period and may be classified into material cost budget and
overhead budget because cost of production includes materials, labour, and overheads.

Materials Budget
In drawing up the production budget, one of the first requirements to be considered is
materials. As we know, materials may be direct or indirect. This materials budget deals with
the requirement and procurement of direct materials. Indirect materials are dealt with under
the works overhead budget. The budget should be related to the production budget and the
period of the budget should be of short duration because this budget has an important bearing
on the cash budget. Material budget can be classified into material requirement budget and
procurement budget. The former gives information about the quantity of material required
during the budget period to attain the production target; while the latter provides the
information about the materials to be acquired from the market during the budget period.
Material procurement budget, taken into consideration the inventory of materials and the
materials on order at the beginning of the budget period and the anticipated inventory of
materials and the materials to be on order on the closing date of the budget period.

Master budget or summarized budget

The Master Budget is a consolidated summary of the various functional budgets. It
has been defined as “a summary of the budget schedules in capsule form made for the
purchase of presenting, in one report, the highlights of the budget forecast”. The master
budget is prepared by the budget committee on the basis of co-ordinate functional budgets
and becomes the target for the company during the budget period when it is finally approved
by the committee. This budget summarizes the functional budgets to produce a budgeted
profit and loss account and a budgeted balance sheet as at the end of the budgeted period.

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Fixed budget
This budget is drawn for one level of activity and one set of conditions. It is a rigid
budget and is drawn on the assumptions that there is no change in budgeted level of activity.
It does not take into consideration any change in expenditures arising out of level of activity.
Thus, it does not provide for changes in expenditure arising out of changes in the anticipated
conditions and activity. A fixed budget will, therefore, be useful only when the actual level of
activity corresponds to the budgeted level of activity. But in practice, the level of activity and
set conditions will change as a result of internal limitations and external factors like changes
in demand and prices, shortage of materials and power, acute competition etc. it is hardly any
use as a mechanism of budgetary control because it does not make any distinction between
fixed, variable, and semi-variable costs and provides for no adjusted in the budgeted figures
as a result of change in costs due to change in level of activity. However, a fixed budget is
useful at the planning stage when it serves to define the board objectives of the organization.

Flexible budget:
It is defined as “a budget designed to change in accordance with the level of activity
actually attained. Thus, a flexible budget gives different budgeted costs for different levels of
activity. A flexible budget is prepared after making an intelligent classification of all
expenses between fixed, variable and semi variable because the usefulness of such a budget
depends upon the accuracy with which the expenses can be classified.
A flexible budget is very useful for purpose of budgetary control because it corresponds with
changes in level of activity. It is helpful in assessing the performance of departmental heads
because their performance can be judged in relation to the level of activity attained by the
organization. Cost ascertainment at different levels of activity is possible because a flexible
budget is prepared for various levels of activity. So it is helpful in price fixation and sending
quotations.

Performance budgeting
In conventional system of budgeting, the money concept was given more prominence
i.e. estimating or projecting rupee value for the various accounting heads or classification of
revenue and cost. Such system of budgeting was more popularly used in government
departments and many business enterprises. But in such budgeting system control of
performance in terms of physical units or the related costs cannot be achieved. These days’

54
budgets are established in such a way so that each item of expenditure is related to a specific
responsibility center and is closely linked with the performance of that center. Developing
work programmes and performance expectations by assigned responsibility is the main issue
involved in fixation of performance budgets and is necessary for the achievement of the goals
and objectives of the enterprise.

Zero base budgeting (ZBB)

The use of ZBB as a managerial tool has become increasing popularly since the early
1970’s. It is steadily gaining acceptance in the business world because it is proving its utility
as a tool integrating the managerial function of planning and control. It first came into being
when ex-president jimmy carter of the United States of America, then governor of the states
of Georgia, introduces it as a means of controlling state expenditure.
A budget represents a quantification of the firm’s objectives and the efficiency of budgeting
as a planning and control device depends upon the activity in which it is being used. Budgets
are best used as a managerial control in activities which are directly related to the final out
put of the organization because the inputs used by these activities can be compared with the
output of these activities.
Budgetary Control:
Budgetary control is applied to a system of management and accounting control by
which all operations and output are forecasted as far ahead as possible and actual results
when known are compared with budget estimates.

Definition:
According to Brown and Howard a budgetary control is a system if controlling
costs, which includes the preparation of budgets, coordination the department and
establishing the responsibilities, comparing actual performance with the budgeted and acting
upon result to achieve maximum profitability. According to Weldon he criticizes budgetary
control as “planning in advance of the various function of a business so that the business as
whole is controlled”. “The establishment of the budgets relating to the responsibilities of
executives to the requirements of a policy and the continuous comparison of actual with
budgeted result either to secure by individual action the objectives of that policy or to provide
firm basis for its revision”. Budgets are the individual objectives of a department, etc where
as budgeting may be said to be the act of building budgets. Budgetary control embraces all

55
this and in addition includes the science of planning the budgets to effect an overall
management tool for the business planning and control. Thus, budget is financial plan and
budgetary control results from the administration of the financial plan.
Process and Importance:
Management and many investors and bank loan officers have become increasingly
aware of the merits of formal business plans. The major technical work of a budgetary
accountant involves expected future and data rather than historical data. There is one
philosophical difference. The advocates of budgeting maintain that the process of preparing
the budget forces the executives to become better administrators. Budgeting puts planning
where is belongs in the forefront of the manager mind. Budgeting is primarily attention
directing because it helps manager to become on operating or financial problems early
enough fro effectively or action.

The major benefits:

 Budgeting, by formalizing the managers responsibilities for planning compels then to
think ahead.
 Budgeting provides definite expectations that are the best frame work for judging
subsequent performance.
 Budgeting aids managers in co-ordination their efforts so that the objectives as a
whole harmonize with objectives of its parts.

Objectives of Budgetary Control

Budgetary control is planned to assist the management allocation of responsibilities and
authority to aid in making estimates and plans for future, to assist in analysis of variations
between estimated and actual results and to develop basis of measurement or standards with
which to evaluate the efficiency of operations. Budgeting is necessary to have to explicit
statement of expectations, communication, coordination and expectations as a frame work for
judging performance. The general objectives of budgetary control are as follows.

1. Planning:
A budget is a plan of the policy to be pursued during the defined period of time to
attain a given objective. The budgetary control will force management at all levels to plan in
time all activates to be done during the future periods. A budget as a plan of action achieves

56
some purposes i.e., (a) Action is guided by well thought out plan because a budget is
prepared after a careful study and research. (b) The budget serves as a mechanism through
which management’s objectives and policies are effected. (c) It is a bridge through which
communication is established between the top management and the operatives who are to
implement the policies of the top management. (d) the most profitable course of action is
selected from the various available alternatives. (e) A budget is complete formulation of the
policy of the undertaking to be pursued for the purpose of attaining a given objective.

2. Coordination:
The budgetary control coordinates the various activities of the firm and secure
cooperation of all concerned so that the common objective of the firm may be successfully
achieved. It forces executives to think and think as a group. It coordinates the border
economic trends and the economic position of an undertaking. It is also helpful in
coordinating the policies, plans and actions. An organization without a budgetary control is
like a ship sailing in a charted sea. A budget gives direction to the business and imparts
meaning and significance to its achievement by making comparison of actual performance
and budgeted performance.

3. Control:
Control consists of the action necessary to ensure that the performance of the
organization conforms to the plans and objectives. Control of performance is possible with
pre-determined standards which are laid down in a budget. Thus, budgetary control makes
control possible by continuous comparison of actual performance with that of the budget so
as to report the variations from the budget to the management for corrective action.

Thus, budgeting system interacts key managerial function performed at all levels in
the managerial hierarchy. But the efficiency of the budget as ma planning and control device
depends up on the activity in which it is being used. A more accurate budget can be
developed for those activities where direct relation ship exists between inputs. The
relationship between inputs and outputs becomes the basis of developing budget and
exercising control.
Budget Manual:
A budget manual is defined as a document schedule or booklet which sets out, inter

57
alia, the responsibilities of the persons engaged in the routine of and the forms and records
required for budgetary control. Thus, it is a written document which guides the executives in
preparing various budgets. Budgets are to be drawn keeping in view the objectives of the
organization given in the budget manual. Responsibility and functions of each executive in
regard to budgeting are written down in the budget manual to avoid any duplication or
overlapping of responsibilities. Steps and the methods for developing various budgets and the
method of reporting performance against the budget are written down in the budget manual.
In short, it is a written document which gives every thing relating to the preparation and
execution of various budgets. It should be clear and there should be no ambiguity in it. The
manual is divided into separate sections so that each manager can be issued only that section
appropriate to his work and responsibilities.

Budget Period:
This may be defined as the period for which a budget is prepared and employed. The
budget period will depend upon the type of business and the control aspect. For example in
case of seasonal industries (i.e., food or clothing), the budget period should be long enough to
meet the requirements of the business. From control point of view, the budget period should
be short one so that the actual results may be compared with the budget each week-end or
month-end and discussed with the budget committee. Long-term budgets should be
supplemented by short term budgets to make the budgetary control successful, as short-term
budgets will help in exercising control over day-to-day operations. In short, the budget period
should not be too long so that estimates may not become unreliable. Similarly it should also
be not too short so that there may be sufficient time before budget implementation. For must
business, annual budget is quite common because it compares with the financial accounting
year. There should be a regular time plan for budget preparation.

Advantages of Budgetary Control:

The advantages of budgetary control arise from the objectives of budgeting i.e.,
planning, coordination, and control can be summed up as follows: The most important
advantage of budgetary control is to enable management to conduct business in the most
efficient manner because budgets are prepared to get the effective utilization of resources and
the realization of objectives as possible. Budgetary control takes the help of different levels
of management in the preparation of the budget. Budget finally approved represents the

58
judgment of the entire organization and not merely that of an individual or a group of
individuals. Thus, it ensures team work. Budget act as a measure of efficiency of departments
and persons working in the organization because budgets provide yard-stick against which
actual performance of departments and employees can be compared. It is helpful in reviewing
current trends in the business and in determining future policy of the business because current
and future trends are studied in the preparation of budgets. It enhances the studying and credit
of the undertaking with the government and the banks because an efficient technique of cost
control is used. Thus, it helps in obtaining bank credit.

Limitations of Budgetary Control:

The budgetary control as a management control device suffers from the following
Limitations.
 It may be impossible to achieve the budgeted targets as estimates and forecasts
relating to the future made in the budget can never be perfectly accurate for the simple
reason that future is unpredictable.
 In rapidly changing conditions it may not be possible to achieve the budgeted targets.
Budget may have to be revised from time to time, but frequent revisions may prove to
be costly affair.
 Budgets may serve as constraints on managerial initiative because every executive
tries to achieve the budgeted targets. It tends to bring out the rigidity in control.
 Correlation and coordination of various budgets is expensive, so small organizations
cannot afford the employment of budgetary control as a cost of control technique.
 Budgetary control may lead to conflicts among functional executives because every
executive may try to get a larger share of budgetary allocation, shirk responsibility
and blame others for pitfalls.

Budgets in Cargo Handling Division (CHD) of Visakhapatnam dock labour board

Budgetary Process in CHD

59
 Every organization prepares a budgets so that it can plan for its future and meets any
unforeseen contingencies and CHD is no expectation to this rule in many organization are,
the budgetary process is taken care of accounts officer.
But at CHD has separate budget section in the finance department, which taken care of the
budgetary process. CHD would organize quarterly meeting under the chairmanship of the
board. They will be organizing of annual accounts and annual report meeting in the month of
October and budget meeting in the month of January, including special meeting to discuss
various urgent and emergency matters regarding all interests in port trust and CHD. Before
commencing every quarterly meeting, the agenda, and sets will be distributed to every
member holds discussions in each section separately and record the observations of the
department individual. The observations will put forward in the board meeting. The labour
trustees will participate in every meeting of the board. Labour trustees point out the problems
and appreciate the progress growth of the CHD and gives suggestion for advantage of
workers of the CHD.
In budget meeting, there is allotment of money to each committee, development of
education in organization. The labour trustees to take advantage with their demands from the
board. In certain matters there will be prevalence of voting and conducting of voting will be
responsible of the board. In the labour trustees would not have right to participate in the
meeting. In board meeting they discuss various matters like working and servicing policies
granting festival advances levy charges on the trade, safety measures of the workers, grant of
incentives to maintenance off staff improving the conditions of the equipment, medical
reimbursement, practical training and other related matters regarding the employees of the
CHD.

Objectives of preparing budgeting in VCHD:

 To know the operating efficiency.
 To formulate the policies to achieve the goal.
 To perform integration and co-ordination among various departments like
construction department, works department, finance department etc.
 To motivate the closely related department and the person for attaining the desired
goal.
 To act as guide to management decision so that management can know how
successfully the objectives are being attained.

60
Budgetary Control in CHD:
Before a week established budgets comes into being, a number of things have been done, so
that there is strong foundation for budgeting. In VCHD, the chairman of the CHD is the head
of the organization. The head of the department of each department in CHD prepare budget
for their department and present it to the chairman of the board their meeting with, the
budgets after being approved by the chairman are placed before the board.
Organization chart for budgetary control

Board officers

Chairman

Budget committee

Establishing Budgetary Controls:

A budget centre is a section of the organization of an undertaking and is defined as
such from the point of viewed of budgetary control. CHD has a number of well is on the basis
of collection of closely related works into one budgetary centers and their functions are
described below briefly.

Medical Department:
Head by the chief medical officer, this department is responsible for maintaining the
health of the employees of the organization.

CMD’s Secretariat:
This department is responsible for planning all the activities to be undertaken by the
CMD.

Works Department:
Head by director, this is the life and flood of the organization.

61
System Department:
This department is responsible for maintaining the various computer
facilities of organization and improves efficiency of labour.

Types of Budgets Prepared By CHD

VCHD prepared two kinds of budgets.
a. Capital Budget
b. Revenue Budget

Capital Budget:
Capital budget deals with new schemes to be intimated during the year and also with
completion of scheme already implemented. It is prepared and approved by VCHD and send
to ministry of finance to enable to ministry to release the required funds.
Capital budget consists of
1. Continue Schemes.
2. New Schemes.

Budget:
CHD would organize quarterly meeting under the chairman ship of the board. They
will be organizing of annual accounts and annual report meeting in the month of October and
budget meeting in the month of January, including special meetings to discuss various urgent
and emergency maters regarding all interests in the port trust and CHD.
Before commencing every quarterly meeting, the agenda sets will be distributed to
every member hold discussions in each section separately and record observations of the
department individual. The observations will be put in the forward in the board meeting.
The labor trustees will participate in every meeting of the board. Labor trustees point out the
problems and appreciate the progress growth of the D.L.B. and give suggestions for
advantage of workers of the CHD.
The budget meeting will be organized in the month of January to discuss over all
budget allocation in each department and over all department of the dock labor board. In
budget meeting there is allotment of money to each committee like welfare committee,
development of education in organization. The labor trustees to take advantage with their

62
demands from the board.
In certain matters there will be prevalence of voting and conducting of voting will be
responsible of the board, in the labor trustees would not have the right to participate in the
meeting. In board meeting they discuss various matters like working and serving policies,
granting festival advances levy of charges on the trade, safety measures of the worker, grant
of incentives to maintain the staff, improving the conditions of the equipment, medical
reimbursement, practical training and other related matters regarding the employees of the
CHD.

Table: 1.1
REVENUE BUDGETS _ REGISTERED SCHEME

63
 Budget Estimates, Revised Estimates & Actual
for the year 2003 - 04

Budget Revised Actuals

Sl Estimates Estimates For
. No Receipts 2003 – 04 (Rs) 2003 - 04(Rs) 2003 - 04 (Rs)
1 Time rate wages 121,660,573 89,200,000 81,000,000
2 Piece rate wages 77,502,645 78,074,000 76,838,000
3 General levy 24,961,208 100,000,000 38,256,000
4 Levy on coals 5,127,194 8,769,000 4,998,000
Interest on 1,288,697 52,000 17,000
5 investment/bank A/C
URS 3,938,000 2,897,500 1,726,236
Board share of Welfa
6
expenditure re 2,897,500 1,726,236
Fund 3,938,000
Levy from M/S
coromandel fertilizers 1,154,381 960,000 1,291,000
7 LTD
Rent-ADM office
399,582 410,000 417,000
8 building
9 Misc Receipts 20,908,305 2,500,000 17,916,000
Total Receipts (A) 256,455,057 287,841,000 226,528,000

Expenditures
1 Payments to workers 256,684,155 221,655,000 215,090,000
2 Payments to staff 25,203,514 26,110,000 26,569,000
3 Office maintenance 3,998,301 4,119,000 4,268,000
4 Repairs & Maintenance 1,416,911 1,675,000 1,736,000
5 Boards contribution 28,145,857 30,335,000 19,904,000
6 Depreciation 680,778 551,000 598,000
Total Expenditure (B) 312,135,514 284,445,000 268,165,000

(+) Surplus/ (-) Deficit (-) 55,680,457 (+) 3,396,000 (-) 41,637,000

REVISED ESTIMATES 2003-04

64
 3 0 0 0 0 0 0 0 0
S I .N O 9

2 5 0 0 0 0 0 0 0 S I .N O 8
S I .N O 7
2 0 0 0 0 0 0 0 0
S I .N O 6

1 5 0 0 0 0 0 0 0 S I .N O 5
S I .N O 4
1 0 0 0 0 0 0 0 0
S I .N O 3

5 0 0 0 0 0 0 0 S I .N O 2
S I .N O 1
0
R E C E I P T S E X P E N D I T U R E

ACTUALS FOR 2003-04

3 0 0 0 0 0 0 0 0
S I .N O 9

2 5 0 0 0 0 0 0 0 S I .N O 8
S I .N O 7
2 0 0 0 0 0 0 0 0
S I .N O 6

1 5 0 0 0 0 0 0 0 S I .N O 5
S I .N O 4
1 0 0 0 0 0 0 0 0
S I .N O 3

5 0 0 0 0 0 0 0 S I .N O 2
S I .N O 1
0
R E C E I P T S E X P E N D I T U R E

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 1.2

65
 Budget Estimates, Revised Estimates & Actuals
for the year 2004 - 05

Budget Revised Actuals

Sl. Estimates Estimates For
No Receipts 2004 - 05 (Rs) 2004 - 05 (Rs) 2004 - 05 (Rs)
1 Time rate wages 68,946,865 85,056,000 76,125,000
2 Piece rate wages 80,372,619 80,000,000 72,519,000
3 General levy 38,967,629 23,604,000 35,500,000
4 Levy on coals 8,958,804 2,746,000 2,500,000
Interest on 1,838,843 10,000 1,350,000
5 investment/bank A/C
Board share URS 1,915,033 2,755,000 2,417,600
6 of Welfare
expenditure 2,755,000 2,417,600
Fund 1,915,033
Levy from M/S
coromandel fertilizers 720,851 840,000 942,000
7 LTD
Rent-ADM office
310,866 417,000 310,000
8 building
9 Misc Receipts 22,606,497 19,000,000 20,000,000
Total Receipts (A) 226,553,040 217,183,000 214,081,200

Expenditures
1 Payments to workers 208,856,514 226,032,000 209,136,000
2 Payments to staff 22,672,766 27,537,000 24,863,400
3 Office maintenance 3,798,194 3,840,000 3,739,300
4 Repairs & Maintenance 1,918,669 1,765,000 1,973,000
5 Boards contribution 8,390,252 8,351,000 25,845,000
6 Depreciation 734,886 449,000 717,000
Total Expenditure (B) 246,371,281 267,974,000 266,273,700

(+) Surplus/ (-) Deficit (-) 19,818,241 (-) 50,791,000 (-) 52,192,500

REVISED ESTIMATES 2004-05

66
 ACTUALS FOR 2004-05

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 1.3

67
 Budget Estimates, Revised Estimates & Actuals
for the year 2005 - 06

Budget Revised Actuals

Sl. Estimates Estimates For
No Receipts 2005 - 06 (Rs) 2005 - 06 (Rs) 2005 - 06 (Rs)
1 Time rate wages 98,113,482 79,930,000 98,088,000
2 Piece rate wages 79,989,189 76,145,000 77,274,000
3 General levy 80,738,275 41,600,000 91,567,000
4 Levy on coals 5,062,306 3,400,000 5,096,000
Interest on 2,150,730 1,350,000 1,420,000
5 investment/bank A/C
Board share URS 2,044,192 2,479,700 1,912,400
6 of Welfare
expenditure Fund 2,044,192 2,479,700 1,912,400
Levy from M/S
coromandel fertilizers 592,997 1,000,000 598,000
7 LTD
Rent-ADM office
476,487 302,000 476,000
8 building
9 Misc Receipts 9,885,738 20,000,000 2,500,000
Total Receipts (A) 281,097,588 228,686,400 280,843,800

Expenditures
1 Payments to workers 247,383,436 217,392,000 238,836,000
2 Payments to staff 24,198,262 25,667,400 23,910,000
3 Office maintenance 3,735,052 3,867,500 7,288,000
4 Repairs & Maintenance 1,904,389 1,960,000 2,045,000
5 Boards contribution 32,121,200 24,514,000 4,142,000
6 Depreciation 742,514 600,000 608,000
Total Expenditure (B) 310,084,853 274,000,900 276,829,000

(+) Surplus/ (-) Deficit (-) 28,987,265 (-) 45,314,500 (+) 4,014,800

REVISED ESTIMATES 2005-06

68
 ACTUALS FOR 2005-06

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 1.4

69
 Budget Estimates, Revised Estimates & Actuals
for the year 2006 - 07

Budget Revised Actuals

Sl. Estimates Estimates For
No Receipts 2006 - 07 (Rs) 2006 - 07 (Rs) 2006 - 07 (Rs)
1 Time rate wages 137,147,000 107,896,000 109,208,000
2 Piece rate wages 79,816,000 75,000,000 76,015,000
3 General levy 121,915,000 101,732,000 89,294,000
4 Levy on coals 6,582,000 5,556,000 6,219,000
Interest on investment/bank
2,963,000 1,290,000 3,119,000
5 A/C
URS 2,111,000 1,691,500 1,842,000
Board share
6
of expenditure Welfare 2,111,000 1,691,500 1,842,000
Fund
Levy from M/S coromandel 0 600,000 0
7 fertilizers LTD
8 Rent-ADM office building 525,000 533,000 525,000
9 Misc Receipts 30,784,000 2,500,000 14,280,000
Total Receipts (A) 383,954,000 298,490,000 302,344,000

Expenditures
1 Payments to workers 289,637,000 246,975,000 251,882,000
2 Payments to staff 24,784,000 19,448,000 20,804,000
3 Office maintenance 4,786,000 4,061,000 4,761,000
4 Repairs & Maintenance 2,165,000 2,400,000 2,231,000
5 Boards contribution 3,922,515 1,365,000 48,323,000
6 Depreciation 1,090,650 505,000 762,000
Total Expenditure (B) 326,385,165 274,754,000 328,763,000

(+) Surplus/ (-) Deficit (+) 57,568,835 (+) 23,736,000 (-) 26,419,000

REVISED ESTIMATES 2006-07

70
 ACTUALS FOR 2006-07

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 1.5

71
 Budget Estimates, Revised Estimates & Actuals
for the year 2007 - 08

Budget Revised Actuals

Estimates Estimates For
Sl. No Receipts 2007 - 08 (Rs) 2007 - 08 (Rs) 2007 - 08 (Rs)
1 Time rate wages 128,681,478 137,147,000 130,104,000
2 Piece rate wages 82,525,090 79,816,000 83,688,000
3 General levy 60,199,000 121,915,000 84,199,000
4 Levy on coals 6,282,000 6,582,000 6,166,000
5 Additional Levy 7,056,000 0 7,256,000
6 Special Levy 23,829,000 0 35,037,000
Interest on
investment/bank A/C/ 2,065,000 2,963,000 1,437,000
7 Delayed payments
Board share URS 1,828,000 2,111,000 1,993,000
8 of Welfare
expenditure Fund 1,828,000 2,111,000 1,993,000
Rent-ADM office
607,224 525,000 838,000
9 building
10 Misc Receipts 10,842,000 30,784,000 10,342,000
Total Receipts (A) 325,743,000 383,954,000 363,053,000

Expenditures
1 Payments to workers 254,170,112 289,637,000 275,824,000
2 Payments to staff 21,300,849 24,784,000 24,000,000
3 Office maintenance 5,070,653 4,786,000 4,431,000
4 Repairs & Maintenance 2,640,714 2,165,000 2,295,000
5 Boards contribution 121,907,918 48,433,000 51,645,000
6 Depreciation 544,032 572,000 528,000
Total Expenditure (B) 405,634,278 370,377,000 358,723,000

(+) Surplus/ (-) Deficit (-) 79,891,278 (+) 13,577,000 (+) 4,330,000

REVISED ESTIMATES 2007-08

72
 ACTUALS FOR 2007-08

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 1.6

73
 Budget Estimates, Revised Estimates & Actuals
for the year 2008 - 09

Budget Revised Actuals

Estimates Estimates For
Sl. No Receipts 2008 – 09 (Rs) 2008 - 09 (Rs) 2008 – 09 (Rs)
Handling & Storage
charges on General 168,391,816 301,576,000 1,918,589,930
1 Cargo
2 Estate Ground Rents 303,612 300,000 5,504,253
3 Rent from Quarters 360,686 429,000 4,614,450
4 Recoverable charges 290,115 224,000 248,490
Finance &
2,053,546 4,568,000 7,350,000
5 Miscellaneous Income
Total Receipts (A) 171,399,775 307,097,000 1,936,307,123

Expenditures
1 Salaries & Wages 51,915,609 218,843,000 52,989,507
2 Stores 21,737,428 2,225,000 7,999,411
3 General Expenses 1,750,071 397,400 453,992
4 Sundry Expenses 1,710,052 8,788,000 6,419,060
5 Depreciation 230,264 1,301,000 1,172,006
Total Expenditure (B) 77,343,424 231,554,400 69,033,976

(+) Surplus/ (-) Deficit (+) 94,056,351 (+) 75,542,600 (+) 1,867,273,147

REVISED ESTIMATES 2008-09

74
 350000000

300000000

250000000

200000000

150000000 SI.NO 5
SI.NO 4
100000000
SI.NO 3
50000000
SI.NO 2
0 SI.NO 1
RECEIPTS EXPENDITURE

ACTUALS 2008-09

2000000000
1800000000
1600000000
1400000000
1200000000
1000000000
SI.NO 5
800000000
SI.NO 4
600000000
SI.NO 3
400000000
SI.NO 2
200000000
SI.NO 1
0
RECEIPTS EXPENDITURE

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 1.7

75
 Budget Estimates, Revised Estimates & Actuals
for the year 2009 - 10

Budget Revised
Estimates Estimates
Sl. No Receipts 2009 – 10 (Rs) 2009 - 10 (Rs)
Handling & Storage
charges on General 560,880,000 1,89,574,000
1 Cargo
2 Estate Ground Rents 1,118,000 5,500,000
3 Rent from Quarters 735,000 4,612,000
4 Recoverable charges 400,000 12,510,000
Finance & Miscellaneous
5,019,000 11,142,000
5 Income
Total Receipts (A) 568,152,000 1,924,338,000

Expenditure
1 Salaries & Wages 391,896,000 154,590,000
2 Stores 4,030,000 7,400,000
3 General Expenses 797,400 5,196,000
4 Sundry Expenses 16,824,000 14,830,000
5 Depreciation 2,298,000 2,760,000
Total Expenditure (B) 419,310,400 184,776,000

(+) Surplus/ (-) Deficit (+) 148,841,600 (+) 1,739,562,000

BUDGET ESTIMATES 2009-10

76
 600000000

500000000

400000000

300000000
SI.NO 5
200000000 SI.NO 4
SI.NO 3
100000000
SI.NO 2
0 SI.NO 1
RECEIPTS EXPENDITURE

REVISED ESTIMATES 2009-10

2000000000
1800000000
1600000000
1400000000
1200000000
1000000000
SI.NO 5
800000000
SI.NO 4
600000000
400000000 SI.NO 3
200000000 SI.NO 2
0 SI.NO 1
RECEIPTS EXPENDITURE

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 2.1

77
 REVENUE BUDGETS _ UNREGISTERED SCHEME

Budget Estimates, Revised Estimates & Actuals

for the year 2003 - 04

Budget Revised Actuals

Sl Estimates Estimates For
. No Receipts 2003 – 04 (Rs) 2003 - 04(Rs) 2003 - 04 (Rs)
1 Time rate wages 10,405,236 7,200,000 7,376,000
2 Piece rate wages 1,205,004 1,800,000 5,200,000
3 General Levy 6,143,393 11,000,000 4,182,000
4 Rent on office building 399,582 404,000 417,000
5 Interest on investment 69,475,396 60,000,000 61,644,000
Interest on loan to co-
3,510,290 2,528,000 2,500,000
6 operative credit society
7 Misc Income 4,743,748 500,000 3,789,000
Total Receipts (A) 95,882,649 83,432,000 85,108,000

Expenditures
1 Payments to workers 21,047,232 16,431,000 21,423,000
2 Payments to staff 9,497,608 8,539,000 9,179,000
3 Board's Contribution 5,955,041 2,279,000 2,337,500
Share of board's
3,493,235 3,938,000 2,897,500
4 expenditure
5 Depreciation 904,820 747,000 803,000
Total Expenditure (B) 40,897,936 31,934,000 36,640,000

(+) Surplus/ (-) Deficit (+) 54,984,713 (+) 51,498,000 (+) 48,468,000

REVISED ESTIMATES 2003-04

78
 ACTUALS FOR 2003-04

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 2.2

79
 Budget Estimates, Revised Estimates & Actuals
for the year 2004 – 05

Budget Revised Actuals

Sl Estimates Estimates For
. No Receipts 2004 – 05 (Rs) 2004 - 05(Rs) 2004 - 05 (Rs)
1 Time rate wages 11,551,191 7,745,000 7,832,000
2 Piece rate wages 2,481,840 5,200,000 5,589,000
3 General Levy 4,264,476 2,943,000 3,817,000
4 Rent on office building 310,866 420,000 310,000
5 Interest on investment 10,417,048 15,000,000 9,652,000
Interest on loan to co-
4,559,167 2,050,000 4,900,000
6 operative credit society
7 Misc Income 176,683 3,000,000 1,100,000
Total Receipts (A) 33,761,271 36,358,000 33,200,000

Expenditures
1 Payments to workers 26,642,316 22,119,500 25,793,500
2 Payments to staff 9,615,924 9,431,000 10,026,800
3 Board's Contribution 1,074,500 1,074,500 2,695,100
Share of board's
2,755,000
4 expenditure 2,755,000 2,417,600
5 Depreciation 665,000 665,000 948,000
Total Expenditure (B) 40,752,740 36,045,000 41,881,000

(+) Surplus/ (-) Deficit (-) 6,991,469 (+) 313,000 (-) 8,681,000

REVISED ESTIMATES 2004-05

80
 ACTUALS FOR 2004-05

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 2.3

81
 Budget Estimates, Revised Estimates & Actuals
for the year 2005 – 06

Budget Revised Actuals

Sl Estimates Estimates For
. No Receipts 2005 – 06 (Rs) 2005 - 06(Rs) 2005 - 06 (Rs)
1 Time rate wages 8,140,887 8,224,000 8,420,000
2 Piece rate wages 4,203,355 5,868,000 3,994,000
3 General Levy 11,868,526 4,626,000 14,129,000
4 Rent on office building 476,487 302,000 476,000
5 Interest on investment 1,194,909 2,827,000 1,089,000
Interest on loan to co-
5,811,442 5,700,000 5,148,000
6 operative credit society
7 Misc Income 1,886,873 1,150,000 100,000
Total Receipts (A) 33,582,479 28,697,000 33,356,000

Expenditures
1 Payments to workers 24,310,506 26,243,500 24,122,000
2 Payments to staff 10,345,969 10,296,800 10,322,000
3 Board's Contribution 3,462,383 3,693,400 727,000
Share of board's
1,915,033 2,479,700 1,912,400
4 expenditure
5 Depreciation 966,018 800,000 808,000
Total Expenditure (B) 40,999,909 43,513,400 37,891,400

(+) Surplus/ (-) Deficit (-) 7,417,430 (-)14,816,400 (-) 4,535,400

REVISED ESTIMATES 2005-06

82
 ACTUALS FOR 2005-06

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 2.4

83
 Budget Estimates, Revised Estimates & Actuals
for the year 2006 – 07

Budget Revised Actuals

Sl Estimates Estimates For
. No Receipts 2006 – 07 (Rs) 2006 - 07(Rs) 2006 - 07 (Rs)
1 Time rate wages 17,300,000 9,262,000 14,559,000

2 Piece rate wages 7,013,000 3,900,000 6,679,000

3 General Levy 19,104,000 14,534,000 15,479,000

4 Rent on office building 525,000 533,000 525,000

5 Interest on investment 2,000,000 1,000,000 2,100,000

Interest on loan to co-
5,325,000 4,603,000 5,500,000
6 operative credit society
7 Misc Income 4,297,000 100,000 2,480,000

Total Receipts (A) 55,564,000 33,932,000 47,322,000

Expenditures
1 Payments to workers 36,238,000 22,261,000 31,934,000

2 Payments to staff 10,698,750 7,107,000 6,950,000

3 Board's Contribution 764,666 311,500 6,900,500

Share of board's
1,889,877 1,691,500 1,842,000
4 expenditure
5 Depreciation 1,296,952 685,000 938,000

Total Expenditure (B) 50,888,245 32,056,000 48,564,500

(+) Surplus/ (-) Deficit (+) 4,675,755 (+) 1,876,000 (-)1,242,500

REVISED ESTIMATES 2006-07

84
 ACTUALS FOR 2006-07

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table: 2.5

85
 Budget Estimates, Revised Estimates & Actuals
for the year 2007 – 08

Budget Revised Actuals

Sl Estimates Estimates For
. No Receipts 2007 – 08 (Rs) 2007 - 08(Rs) 2007 - 08 (Rs)
1 Time rate wages 18,771,700 17,300,000 19,197,000
2 Piece rate wages 7,500,444 7,013,000 7,227,000
3 General Levy 13,172,230 19,104,000 15,863,000
4 Additional Levy 0 0 1,096,000
5 Special Levy 0 0 5,291,000

6 Rent on office building 984,047 525,000 838,000

7 Interest on investment 913,112 2,000,000 829,000

Interest on loan to co-
3,278,895 5,325,000 3,279,000
8 operative credit society
9 Misc Income 2,402,858 4,297,000 1,995,000
Total Receipts 47,023,286 55,564,000 55,615,000

1 Payments to workers 36,810,834 36,238,000 36,266,000

2 Payments to staff 7,015,671 8,029,000 7,531,000
3 Board's Contribution 13,340,082 6,926,600 7,587,400
Share of board's
1,955,479 2,111,000 1,993,000
4 expenditure
5 Depreciation 699,768 694,000 681,000
Total Expenditures 59,821,834 53,998,600 54,058,400

(+) Surplus/ (-) Deficit (-) 12,798,548 (+) 1,565,400 (+) 1,556,600

REVISED ESTIMATES 2007-08

86
 BUDGET ESTIMATES 2007-08

NOTE:
RECEIPTS > EXPENDITURES = SURPLUS
RECEIPTS < EXPENDITURES = DEFICIT

Table-11

87
 CAPITAL BUDGETS

ADMINISTRATIVE BODY - REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2003-04

BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2003-04 2003-04
Rs Rs
Improvements to office buildings,
1 50,000 0
call stands & generators
Water coolers at AOB & Air
2 50,000 0
Conditioners
3 Computers 1,250,000 1,250,000
4 Walkie & Talkie 15,000 0
5 Furniture & Equipment 0 0
Total 1,365,000 1,250,000

CAPITAL BUDGETS 2003-04

1400000
SI.NO 5
1200000
1000000 SI.NO 4
800000 SI.NO 3
600000
SI.NO 2
400000
200000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2003-04, the
budget shows 1,25,0000 as against the budget estimates of 1,365,000. So there is a difference
of 115,000
Table-12

88
 ADMINISTRATIVE BODY - REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2004-05

BUDGET REVISED
SL NO DESCRIPTION ESTIMATES ESTIMATES
2004-05 Rs 2004-05 Rs

Improvements to office buildings,

1 0 0
call stands & generators
Water coolers at AOB & Air
2 0 0
Conditioners

3 Computers 1,250,000 250,000

4 Walkie & Talkie 0 0

5 Furniture & Equipment 50,000 50,000

Total 1,300,000 300000

CAPITAL BUDGETS 2004-05

1400000
SI.NO 5
1200000
1000000 SI.NO 4
800000 SI.NO 3
600000
SI.NO 2
400000
SI.NO 1
200000
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2004-05, the
budget shows 300,000 as against the budget estimates of 1,300,000. So there is a difference
of 1,000,000

Table-13

89
 ADMINISTRATIVE BODY - REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2005-06

BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2005-06 2005-06
RS RS
Improvements to office buildings,
1 0 0
call stands & generators
Water coolers at AOB & Air
2 0 0
Conditioners
3 Computers 1,250,000 500,000
4 Walkie & Talkie 0 0
5 Furniture & Equipment 50,000 0
Total 1300000 500000

CAPITAL BUDGETS 2005-06

1400000
SI.NO 5
1200000
1000000 SI.NO 4
800000 SI.NO 3
600000
SI.NO 2
400000
SI.NO 1
200000
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2005-06, the
budget shows 500,000 as against the budget estimates of 1,300,000. So there is a difference
of 800,000

Table-14

ADMINISTRATIVE BODY - REGISTERED SCHEME

90
 Revised Estimates and Budget Estimates for the year 2006-07

BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2006-07 2006-07
RS RS
Improvements to office buildings,
1 0 0
call stands & generators
Water coolers at AOB & Air
2 150,000 122,000
Conditioners
3 Computers 250,000 250,000
4 Walkie & Talkie 50,000
5 Furniture & Equipment 0 40,000
Total 450000 412000

CAPITAL BUDGETS 2006-07

500000
SI.NO 5
400000
SI.NO 4
300000 SI.NO 3
200000 SI.NO 2
100000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretations:

The above table clearly shows that the revised estimates for the year 2006-07, the
budget shows 412,000 as against the budget estimates of 450,000. So there is a difference of
38,000

Table-15
ADMINISTRATIVE BODY - REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2007-08

91
 BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2007-08 2007-08
RS RS

Improvements to office buildings, call

1
stands & generators
2 Water coolers at AOB & Air Conditioners 25,000
3 Computers 250,000 250,000
4 Walkie & Talkie 0
5 Furniture & Equipment 10,000 10,000
Total 285,000 260,000

CAPITAL BUDGETS 2007-08

300000
SI.NO 5
250000
SI.NO 4
200000
SI.NO 3
150000
100000 SI.NO 2

50000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2007-08, the
budget shows 260,000 as against the budget estimates of 285,000. So there is a difference of
25,000

Table-16
ADMINISTRATIVE BODY - UN REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2003-04

92
 BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2003-04 2003-04
Rs Rs

Improvements to office buildings, call

1 50,000 0
stands & generators
2 Water coolers at AOB & Air Conditioners 50,000 0

3 Computers 1,250,000 1,250,000

4 Walkie & Talkie 15,000 0

5 Furniture & Equipment 0 0

Total 1,365,000 1250000

CAPITAL BUDGETS 2003-04

1400000
SI.NO 5
1200000
1000000 SI.NO 4
800000 SI.NO 3
600000
SI.NO 2
400000
200000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2003-04, the
budget shows 1,25,0000 as against the budget estimates of 1,365,000. So there is a difference
of 115,000

Table-17
ADMINISTRATIVE BODY - UN REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2004-05

93
 BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2004-05 2004-05
Rs Rs

Improvements to office buildings, call

1 0 0
stands & generators
2 Water coolers at AOB & Air Conditioners 0 0
3 Computers 1,250,000 250,000
4 Walkie & Talkie 0 0
5 Furniture & Equipment 50,000 50,000
Total 1,300,000 300000

CAPITAL BUDGETS 2004-05

1400000
SI.NO 5
1200000
1000000 SI.NO 4
800000 SI.NO 3
600000
SI.NO 2
400000
SI.NO 1
200000
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2004-05, the
budget shows 300,000 as against the budget estimates of 1,300,000. So there is a difference
of 1,000,000

Table-18
ADMINISTRATIVE BODY - UN REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2005-06

94
 BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2005-06 2005-06
Rs Rs

Improvements to office buildings, call

1 0 0
stands & generators
2 Water coolers at AOB & Air Conditioners
3 Computers 1,250,000 500,000
4 Walkie & Talkie 0 0
5 Furniture & Equipment 50,000
Total 1,300,000 500,000

CAPITAL BUDGETS 2005-06

1400000
SI.NO 5
1200000
1000000 SI.NO 4
800000 SI.NO 3
600000
SI.NO 2
400000
200000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2005-06, the
budget shows 500,000 as against the budget estimates of 1,300,000. So there is a difference
of 800,000

Table-19
ADMINISTRATIVE BODY - UN REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2006-07

95
 BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2006-07 2006-07
Rs Rs

Improvements to office buildings, call

1 0 0
stands & generators
2 Water coolers at AOB & Air Conditioners 150,000 122,000
3 Computers 250,000 250,000
4 Walkie & Talkie 50,000 0
5 Furniture & Equipment 0 40,000
Total 450,000 412,000

CAPITAL BUDGETS 2006-07

500000
SI.NO 5
400000
SI.NO 4
300000 SI.NO 3
200000 SI.NO 2
100000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2006-07, the
budget shows 412,000 as against the budget estimates of 450,000. So there is a difference of
38,000

Table-20
ADMINISTRATIVE BODY - UN REGISTERED SCHEME

Revised Estimates and Budget Estimates for the year 2007-08

96
 BUDGET REVISED
ESTIMATES ESTIMATES
SL NO DESCRIPTION
2007-08 2007-08
Rs Rs

Improvements to office buildings, call stands &

1 0 0
generators
2 Water coolers at AOB & Air Conditioners 25,000 0
3 Computers 250,000 250,000
4 Walkie & Talkie 0 0
5 Furniture & Equipment 10,000 10,000
Total 285,000 260,000

CAPITAL BUDGETS 2007-08

300000
SI.NO 5
250000
SI.NO 4
200000
SI.NO 3
150000
100000 SI.NO 2

50000 SI.NO 1
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

The above table clearly shows that the revised estimates for the year 2007-08, the
budget shows 260,000 as against the budget estimates of 285,000. So there is a difference of
25,000

ANALYSIS & INTERPRETATIONS

REGISTERED SCHEME
REVENUE BUDET 2003-04

97
 10000000
5000000
0
-5000000 REVISED ESTIMATES ACTUALS

-10000000
-15000000
-20000000
-25000000
(+) SURPLUS/DEFICIT (-)
-30000000
-35000000
-40000000
-45000000

Interpretation:

From the above table we observe that the revised estimates receipts are more than the
expenditures, hence it shows surplus in 2003-04 i.e., 3,396,000 where as the actual
expenditures are more than the receipts, hence it shows deficit in 2003-04 i.e., -41,637,000.

The deficit is mainly due to the following reasons:

Receipts:
• Decrease in collection of General Levy, Levy on coals. It occurred due to Levy rate
was restructured ranging from 188% to 10% to an uniform percentage of 50% w.e.f
01-09-2003.

• Decrease in share of expenditure from Un-registered scheme and Welfare Fund.

Expenditure:
• Increase in Payments to Staff.
• Increase in Depreciation.

REVENUE BUDET 2004-05

98
 -50000000
REVISED ESTIMATES ACTUALS

-50500000

-51000000

-51500000
SURPLUS (+)/ DEFICIT (-)

-52000000

-52500000

Interpretation:

From the above table we observe that the revised estimates expenditures are more
than the receipts, hence it shows deficit in 2004-05 i.e. -50,791,000 where as the actual
expenditures are more than the receipts, hence it shows deficit in 2004-05 i.e. -52,192,500.

The deficit is mainly due to the following reasons:

Receipts:
• Decrease in collection of Time rate wages and Piece rate wages.

• Decrease in collection of Rent on ADM Office building.

Expenditure:
• Increase in Board’s contribution towards Provident Fund, Pension Fund, Gratuity
Fund, Family Security Scheme Fund and Mutual Fund on House Building Advances.

• Increase in Depreciation.

REVENUE BUDET 2005-06

99
 10000000

0
REVISED ESTIMATES ACTULAS
-10000000

-20000000

-30000000 SURPLUS (+)/ DEFICIT (-)

-40000000

-50000000

Interpretation:

From the above table we observe that the revised estimates expenditures are more
than the receipts, hence it shows deficit in the year 2005-06 i.e. -45,314,500 where as the
actual receipts are more than the expenditures, hence it shows surplus in the year 2005-06
i.e., 4,014,800.

The surplus is mainly due to the following reasons:

Receipts:
• Increase in collection of General Levy.

• Increase in collection of Levy on coals.

Expenditure:
• Decrease in Board’s contribution towards Provident Fund, Pension Fund, Gratuity
Fund, Family Security Scheme Fund and Mutual Fund on House Building Advances.

• Decrease in Payments to staff.

REVENUE BUDET 2006-07

10
 30000000

20000000

10000000

0
REVISED ESTIMATES ACTUALS
-10000000 SURPLUS (+)/ DEFICIT (-)

-20000000

-30000000

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2006-07 i.e. 23,736,000 where as the
actual expenditures are more than the receipts, hence it shows deficit in the year 2006-07 i.e.
-26,419,000.

The deficit is mainly due to the following reasons:

Receipts:
• Decrease in collection of General Levy.

• Decrease in collection of Levy from CFL.

Expenditure:
• Increase in Payments to workers and staff.

• Increase in Board’s contribution and Depreciation.

REVENUE BUDET 2007-08

10
 16000000

14000000

12000000

10000000

8000000

6000000

4000000 SURPLUS (+)/ DEFICIT (-)

2000000

0
REVISED ESTIMATES ACTUALS

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2007-08 i.e. 13,577,000. Where as the
actual budget estimates receipts are more than the expenditures, hence it shows surplus in the
year 2007-08 i.e. 4,330,000.

The surplus is mainly due to the following reasons:

Receipts:
• Increase in collection of Additional Levy.

• Increase in collection of Special Levy.

Expenditure:
• Decrease in Payments to workers and staff.

• Decrease in Office maintenance and Depreciation.

REVENUE BUDET 2008-09

10
 2000000000
1800000000
1600000000
1400000000
SURPLUS (+)/ DEFICIT (-)
1200000000

1000000000
800000000
600000000
400000000
200000000
0
REVISED ESTIMATES ACTUALS

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2008-09 i.e. 75,542,600 where as the
actual receipts are more than the expenditures, hence it shows surplus in the year 2008-09
i.e. 1,867,273,147.

The surplus is mainly due to the following reasons:

Receipts:
• Increase in Handling & Storage charges on General Cargo.

• Increase in Estate Rentals on account of normal escalation in lease rentals.

Expenditure:
• Decrease in Salaries & Wages.

• Decrease in Sundry expenses and Depreciation.

REVENUE BUDET 2009-10

10
 2000000000
1800000000
1600000000
1400000000
1200000000
1000000000
800000000
600000000 SURPLUS (+)/ DEFICIT (-)
400000000
200000000
0
BUDGET ESTIMATES REVISED ESTIMATES

Interpretation:

From the above table we observed that the budget estimates receipts are more than the
expenditures, hence it shows surplus in the year 2009-10 i.e. 148,841,600. Where as the
revised estimates receipts are more than the expenditures, hence it shows surplus in the year
2009-10 i.e. 1,739,562,000.

The surplus is mainly due to the following reasons:

Receipts:
• Increase in Handling & Storage charges on General Cargo.

• Increase in Estate Rentals on account of normal escalation in lease rentals.

Expenditure:
• Decrease in Salaries & Wages.

• Decrease in Sundry expenses.

UNREGISTERED SCHEME

10
 REVENUE BUDET 2003-04

52000000
51500000
51000000
50500000
50000000
49500000
49000000
48500000
48000000 SURPLUS (+)/ DEFICIT (-)
47500000
47000000
46500000
REVISED ESTIMATES ACTUALS

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2003-04 i.e. 51,498,000, where as the
actual receipts are more than the expenditures, hence it shows surplus in the year 2003-04 i.e.
48,468,000.

The surplus is mainly due to the following reasons:

Receipts:

• Increase in Interest on investment.

Expenditure:

• Decrease in Share of Board’s Expenditure.

REVENUE BUDET 2004-05

10
 1000000
0
-1000000 REVISED ESTIMATES ACTUALS

-2000000
-3000000
-4000000
-5000000
-6000000
SURPLUS (+)/ DEFICIT (-)
-7000000
-8000000
-9000000
-10000000

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2004-05 i.e. 313,000, where as the actual
expenditures are more than the receipts, hence it shows deficit in the year 2004-05 i.e.
-8,681,000.

The deficit is mainly due to the following reasons:

Receipts:
• Decrease in Interest on investment.

Expenditure:
• Increase in Payments to workers and staff.

• Increase in Board’s contribution and Depreciation.

REVENUE BUDET 2005-06

10
 0
REVISED ESTIMATES ACTUALS
-2000000

-4000000

-6000000

-8000000

-10000000
SURPLUS (+)/ DEFICIT (-)
-12000000

-14000000

-16000000

Interpretation:

From the above table we observe that the revised estimates expenditures are more
than the receipts, hence it shows deficit in 2005-06 i.e. -14,816,400 where as the actual
expenditures are more than the receipts, hence it shows deficit in 2005-06 i.e. -4,535,400.

The deficit is mainly due to the following reasons:

Receipts:
• Decrease in Collection of General Levy.

• Decrease in Interest on investment.

Expenditure:
• Increase in Payments to staff.

• Increase in Depreciation.

REVENUE BUDET 2006-07

10
 2500000

2000000

1500000

1000000

500000

0
REVISED ESTIMATES ACTUALS SURPLUS (+)/ DEFICIT (-)
-500000

-1000000

-1500000

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2006-07 i.e. 1,876,000 where as the
actual expenditures are more than the receipts, hence it shows deficit in the year 2006-07 i.e.
-1,242,500.

The deficit is mainly due to the following reasons:

Receipts:
• Decrease in Rent on Office Building.

Expenditure:
• Increase in Payments to workers.

• Increase in Board’s Contribution and Depreciation.

REVENUE BUDET 2007-08

10
 1568000

1566000

1564000

1562000

1560000

1558000

1556000
SURPLUS (+)/ DEFICIT (-)
1554000

1552000
REVISED ESTIMATES ACTUALS

Interpretation:

From the above table we observed that the revised estimates receipts are more than
the expenditures, hence it shows surplus in the year 2007-08 i.e. 1,565,400 where as the
actual receipts are more than the expenditures, hence it shows surplus in the year 2007-08 i.e.
1,556,600.

The surplus is mainly due to the following reasons:

Receipts:
• Increase in collection of Additional Levy and Special Levy.
• Increase in Interest on investment.

Expenditure:

• Decrease in Payments to staff.

• Decrease in Share of Board’s Expenditure.

FINDINGS

10
 The advantages of budgetary control arise from the objectives of budgeting i.e.,
planning, coordination, and control can be summed up as follows: The most important
advantage of budgetary control is to enable management to conduct business in the most
efficient manner because budgets are prepared to get the effective utilization of resources and
the realization of objectives as possible. Budgetary control takes the help of different levels
of management in the preparation of the budget. Budget finally approved represents the
judgment of the entire organization and not merely that of an individual or a group of
individuals. Thus, it ensures team work. Budget act as a measure of efficiency of departments
and persons working in the organization because budgets provide yard-stick against which
actual performance of departments and employees can be compared. It is helpful in reviewing
current trends in the business and in determining future policy of the business because current
and future trends are studied in the preparation of budgets. It enhances the studying and credit
of the undertaking with the government and the banks because an efficient technique of cost
control is used. Thus, it helps in obtaining bank credit. When we observe the budgets there is
a large variations in actual and revised budgets

REVENUE BUDGET

Registered Scheme:
In this scheme the year’s 2005-06 & 2007-08 Revised Budget Estimates are ended
with the surplus and the remaining year’s viz., 2003-04, 2004-05 & 2006-07 are ended with
the deficit. In this scheme the years 2003-04, 2006-07 & 2007-08 Actual Budget Estimates
are ended with the surplus and the remaining year’s viz., 2004-05 & 2005-06 are ended with
the deficit.

Un-Registered Scheme:
In this scheme the year’s 2003-04 & 2007-08 Revised Budget Estimates are ended
with the surplus and the remaining year’s viz., 2004-05, 2005-06 & 2006-07 are ended with
the deficit. In this scheme the year’s 2003-04, 2004-05, 2006-07 & 2007-08 Actual Budget
Estimates are ended with the surplus and the remaining year’s 2005-06 are ended with the
deficit.

11
 CAPITAL BUDGETS

Registered Scheme:
In recent budget ended with a deficit and expenditure was increasing year by year. In
this scheme year 2003-04 & 2005-06, budgets are ended with surplus, remaining year’s viz.,
2004-05, 2006-07 & 2007-08 were ended with a deficit.

Un-Registered Scheme:
In recent budget ended with a deficit and expenditure was decreasing year by year. In
this scheme year 2003-04 budgets are ended with surplus, remaining year’s viz., 2004-05,
2005-06, 2006-07 & 2007-08 were ended with a deficit.

Before commencing every quarterly meeting, the agenda sets will be distributed to
every member hold discussions in each section separately and record observations of the
department individual. The observations will be put in the forward in the board meeting.
The labor trustees will participate in every meeting of the board. Labor trustees point out the
problems and appreciate the progress growth of the D.L.B. and give suggestions for
advantage of workers of the CHD. The budget meeting will be organized in the month of
January to discuss over all budget allocation in each department and over all department of
the dock labor board. In budget meeting there is allotment of money to each committee like
welfare committee, development of education in organization. The labor trustees to take
advantage with their demands from the board.
After going for analysis there are certain findings like the revised estimates
expenditures are more than the receipts, hence it shows deficit in the year 2006-07 i.e.
-1,242,500. Where as the actual budget estimates receipts are more than the expenditures,
hence it shows surplus in the year 2006-07 i.e. 1,876,000. Revised estimates receipts are
more than the expenditures, hence it shows surplus in the year 2007-08 i.e. 1,556,600. Where
as the actual budget estimates receipts are more than the expenditures, hence it shows surplus
in the year 2007-08 i.e. 1,565,400.

11
 SUGGESTIONS

Workers of the VCHD are encouraged by making them to their suggestions regarding
the improvement in the production through suggestion their by stimulating creative thinking
of the workers. VCHD is also following basic procedures and policies for equipment
selection, promotion grievance handling and disciplinary and action. In order to maintain
harmonious labour management relations effective communicated system should be
developed by explaining regarding the organization to the workers and make them to under
stand the problems of the management and also mutual trust for the develop between the
workers and management.
Workers satisfaction and workers satisfaction take organization to greater heights so
the management should develop free mind and trust in the workers which will survey lead to
further success.

11
 SUMMARY

The project entitled by budget and budgetary control in VCHD is divided into 5 chapters.
The first chapter is deals with the introduction to budget and budgetary control
along with the objectives, methodology and limitations of the study.
The second is chapter deals with the industry profile.
The third chapter deals with the organization profile of genesis & growth,
objectives, structure of organization, information about various functional departments and
organization at glance.
The fourth chapter deals with the totally theoretical frame work of the budget and
budgetary control analysis theory and practices of the VCHD which includes comparative
balance sheet, comparative income and expenditure statements, common size balance sheet
and common size income and expenditure statements of the organization.
The fifth chapter is deals with the statements of budgets and budgetary control
analysis and practices of the VCHD in the last five years.
The sixth chapter deals with the summary, findings, suggestions of the overall
project. Then the suggestions are given for the important of the VCHD.

Questionnaire

11
 Name:
Designation:
Please provide answers to the following questions:

1. Are you aware of the budgets prepared by your organization?

a) Yes b) No c) Not Applicable

2. Are you aware of the budgeting process taking place in your organization?
a) Yes b) No c) Not Applicable

3. How often the budget meetings are conducted by the board?

a) Frequently b) Rarely c) Not Applicable

4. Are financial targets are set up in the meetings?

a) Yes b) No c) Not Applicable

5. Are budgetary responsibilities established for different sections during the meetings?
a) Yes b) No c) Not Applicable

6. Are staff aware of their responsibilities in each section?

a) Yes b) No c) Not Applicable

7. Does income and expenditure appear on the budget statements?

a) Yes b) No c) Not Applicable

8. Are budgets prepared separately for Registered and Unregistered Schemes?

a) Yes b) No c) Not Applicable

9. Who reviews each budget?

a) A member of staff at a senior level
b) A member of staff at a junior level
c) A non-staff member
d) Not Applicable

10. Does the organization adhere to its time table for the preparation and release of the
budgets?
a) Yes b) No c) Not Applicable
11. How often is information sent to budget holders?
a) Monthly b) Quarterly c) Annually d) Not Applicable

11
12. Does the organization release to the public a mid-year review of the budget that includes
updated income and expenditure estimates for the budget year underway?
a) Yes b) No c) Not Applicable

13. Are budget statements included in the Annual Reports?

a) Yes b) No c) Not Applicable

14. Are variations in income and expenditure reported to budget holders and the board?
a) Yes b) No c) Not Applicable

15. Is a standard report format used for informing?

a) Yes b) No c) Not Applicable

16. Are budget holders satisfied with the information?

a) Yes b) No c) Not Applicable

17. Does the budget present information on Contingent Liabilities (such as government loan
guarantees)?
a) Yes, extensive information on Contingent Liabilities is presented.
b) Yes, some information on Contingent Liabilities is presented, but certain
details are excluded.
c) No, information on Contingent Liabilities is not presented.
d) Not Applicable

18. Does the budget present information on Future Liabilities (such as civil service
pensions)?
a) Yes, extensive information on Future Liabilities is presented.
b) Yes, information on Future Liabilities is presented, highlighting key Future
Liabilities, but certain details are excluded.
c) No, information on Future Liabilities is not presented.
d) Not Applicable

19. Are the budgets useful for assessing the performance of your organization?
a) Yes b) No c) Not Applicable

20. Does the budget contain performance indicators, such that one can asses whether
there has been progress towards meeting policy goals?

11
 a) Yes b) No c) Not Applicable

21. Please give your suggestions to improve Budgetary control in your organization:

REFERENCES

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 I.M.Pandey: Management Accounting Vikas Publishing House.ND

 Prasanna Chandra, Financial Management Theory and Practice, Tata McGraw Hill.

 Pandey IM, Financial Management, Vikas.

 L.M.Bhole, Financial Institutions and Market, Tata McGraw Hill.

 V.A.Avadhani, Marketing of Financial Services, Himalya Publishers, Mumbai

Annual reports of Visakhapatnam Cargo Handling Division

Web site: www.vizagport.com.

Web site: www.chd.com

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