Cabinet Clears Plan To Merge Rail Budget With Union Budget

    • Publish Date: Sep 22 2016 10:36AM
    • |
    • Updated Date: Sep 22 2016 11:28AM
Cabinet Clears Plan To Merge Rail Budget With Union Budget

In a major financial sector reform, India on Wednesday decided to do away with a 92-year-old legacy of separate general and railway budgets by unifying them, a tradition that has been continuing since British colonial times. The budget presentation date in all likelihood is being advanced to February 1 every year, from the last day of February as was the norm. "From coming year, the railway and the general budgets will be amalgamated. There will be only one budget. And secondly, distinction between plan and non-plan expenditure will be ended from next year. Consequently there will be only one appropriation bill," Union Finance Minister Arun Jaitley said after a Cabinet meeting.

Jaitley said over the years the general budget expenditures have gone up than the railways, and added that ministries like defence have more expenditures than railways but form part of the general budget. The decision to merge the rail and general budgets was mooted by Railway Minister Suresh Prabhu and endorsed by NITI Aayog's member Bibek Debroy, which also proposed the doing away of the distinction between plan and non-plan expenditure.

Both Jaitley and Prabhu clarified that the distinct identity of the Indian Railways will be maintained - including the freedom to raise resources via extra-budgetary means. "Functional autonomy of the Railways will be maintained," Jaitley said. - IANS

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Vishnu Varthan J Bethel Mat Hr Sec School

As far as merger of the rail and general budget is concerned, it is a good move but at same time autonomy of the railways and the structure of railway board needs to be maintained. If that is changed it might make it difficult for the Railways.

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