In a historic step, the BJP Government has decided to do away with the 92 year old tradition of presenting the Railway Budget separately. It has been proposed that the Rail budget will be merged with the Union Budget starting next year in what Finance Minister Arun Jaitley described as “top priority” after the cabinet gave its approval to the move.
The move to discard the British-era practice of a separate rail budget by the Modi government comes after a two-member committee comprising Niti Aayog member Bibek Debroy and Kishore Desai recommended the exercise be scrapped.
The end of a separate Budget will be a relief for the Railways, since its revenue deficit and capital expenditure will now get transferred to the Finance Ministry.
The country’s largest employer 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. 33,000 crore on subsidies for passenger service.
The Railways is also facing an accumulated burden of a whopping Rs. 4.83 lakh crore towards execution of 458 unfinished and ongoing projects.
With the scrapping of the rail budget, the Railways will also not have to pay a special dividend to the government for getting gross budgetary support. The Railways pays about Rs. 10,000 crore as dividend a year after getting about Rs. 40,000 crore.
“A historic step,” tweeted Railway Minister Suresh Prabhu, adding, “This will help raise capital expenditure in Railways which will enhance connectivity in the country and boost economic growth. Functional autonomy, distinct identity of Railways will remain as it is. Our efforts to leverage extra budgetary resources will continue. The merger would also facilitate an integrated and seamless approach towards transportation strategy in the country.”
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