Railway budget to be merged with General budget from 2017

In this February 2015 picture, bags containing the Railway Budget papers are seen outside Parliament in New Delhi. Photo: R.V. Moorthy  

The 92-year-old practice of presenting a Railway budget is set to come to an end from the next fiscal, with the Finance Ministry accepting Railway Minister Suresh Prabhu’s proposal to merge it with the General budget.

According to railways, the Finance Ministry has now constituted a five-member committee, comprising senior officials of the Ministry and the national transporter, to work out the modalities of the merger and submit a report.

“I had written to Finance Minister Arun Jaitley for merger of the Rail budget with General budget. This will be in the Railways' interest and also in the nation’s interest. We are working out the modalities,” Mr. Prabhu told PTI.

The public sector behemoth has to bear an additional burden of about Rs. 40,000 crore on account of implementation of the 7th Pay Commission awards, besides an annual outgo of Rs. 32,000 crore on subsidies.

Besides, the delay in completion of projects has resulted in a cost overrun of Rs. 1.07 lakh crore and huge throw-forward of Rs. 1.86 lakh crore in respect of 442 ongoing rail projects.

If the merger happens, the Railways will get rid of the annual dividend they have to pay for gross budgetary support from the government every year.

According to a senior Railway official, the move to discard Rail budget is part of the Modi government’s reform agenda.

With the merger, the issue of raising passenger fares, an unpopular decision, will be the Finance Minister’s call.

Mr. Prabhu told the Rajya Sabha on August 9 that he had asked the Finance Minister to merge the Railway budget with General budget in the long term interest of national transporter as well as the country’s economy.

All-India Railwaymen’s Federation general secretary Gopal Mishra said the Railway Ministry’s autonomy would be lost in the merger. “But we have to see in what form the merger will happen,” he added.

The merger move is significant as it is expected to have political implications. It has been seen that almost every Railway Minister, particularly in coalition governments, had addressed his constituencies by doling out favours by way of new trains and projects.

The Railway Ministry is likely to lose much of its sheen if the merger happens.

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Printable version | Nov 28, 2020 10:08:20 AM |

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