In 1920, an East Indian Railway Committee was constituted under the chairmanship of William Acworth. This committee consisted of 10 members and among them 3 were Indians.⁣
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Included Indian members were V S Sriniwas Sastri (Member of Council of States) , Purshottam Das Thakurdas (representing Indian Commercial Interests) and Rajendra Nath Mukherjee.⁣
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The Acworth Committee recommended the consolidation and nationalization of the Indian Railways. ⁣
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Based upon the recommendations of Acworth Committee, the Finances of Railways were separated in 1924 and thus from 1924 onwards, the Railway Budget is separated from the General Budget.⁣
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The Acworth Committee recommendations were finally passed on September 20, 1924 as the Separation Convention. Separation of railway finances from general finances was by far the most important reform  in financial management. ⁣
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The key recommendations were as follows:⁣
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Separation of Railway Finances:⁣
Complete separation of the Railway budget from the general budget of the country was done. ⁣
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Liberation of Railway Management:⁣
From the control of Finance Department ⁣
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Loan Account Separation:⁣
Separation of loan account (known as capital-at-charge) and the Block Account (gross block of assets) followed in the wake of separation of Railway finance. ⁣
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Borrowings of the Railways:⁣
Loans have to be repaid if taken from the revenue budget of the years to come.⁣
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A Standing Finance Committee for Railways:⁣
The Department of Railways will submit its estimates to a newly constituted State Finance Commission before it is time for the deliberation on Demand for Grants for Railways. ⁣
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Budget Presentation:⁣
The Railway budget was to be presented to the Legislature prior to the general budget with distinct days for its discussion. The accounts and functions of the Railways would be stated by the Member-in-Charge.⁣
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Periodic Revision:⁣
These recommendations would be tested for at least three years and then revised from time to time. Hence, the Railway budget was separated from the general budget to mark a new phase in the Indian Financial Administration.⁣