Indian Railway was one of the first few government departments to introduce computers in the country. Computerisation on Indian Railways started in the late 60s with the induction of IBM 1401s in the nine zonal railways, three production units, and the Railway Board. Many applications were computerised such as Passenger Revenue and Goods Accounting, Financial Management, Inventory. Operating Statistics etc. While these systems proved to be beneficial to the Railways, they were soon found to be inadequate to cater to the increasing requirements. But it was only in the VII th plan period from 1985-0 when these IBM 1401s were replaced with third and fourth generation computer systems. Computerisation in the production units and the zonal railways were strengthened, and computers were introduced in the divisions, workshops and stores. Also, many new areas for computerisation such as Passenger Reservation System (PRS), Freight Operations Information System (FOIS) etc. were initiated. these developments are now beginning to show impacts on both the Railway system and its users. About Rs.240 crores were spent on computerisation in the VII th plan; requirement of funds for computerisation in the VIII th plan from 1990-1995 is projected at Rs. 880 crores.