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Q. End of separate rail budget: Discuss the issue of scrapping separate rail budget presentation and its impact on railways.
Sep 23, 2016 Related to : GS Paper -3

Ans :

Introduction-

Recently central government has scrapped the process of presenting separate railway budget. Even though railway budget was part of overall union budget, but it was used to present separately. With decision to scrap separate presentation, now it will presented with annual budget like all other departments.

Background-

  • Separate Railway budget in India started in the year 1924 by colonial ruler based on the recommendation of Acworth report headed by William Acworth.
  • In earlier times funds entailed by railways more than the India’s expenditure on all other aspects of administration combined.
  • In that case separate railway budget had made sense. But the situation has been changed now. 
  • Now Railways’ outlay is just 6% of the total expenditure proposed in the Union Budget for this year.
  • In fact revenue from other departments like defence, road transport etc are more than the railways since many years.
  • In this background separate presentation of railway budget has been stopped.

Reason behind continuation of separate budget-

  • The main reason behind continuation of railway budget for so long is India’s fractured polity, where government in charge were not in position to take tough decision.
  • Similarly the tendency of coalition partners to demand Railways as a juicy portfolio with its possibilities for populist posturing and patronage has made to continue this colonial era practice.

How scrapping separate budget will help-

  • Now minister in charge of railways will no longer need to make illogical and irrational promises to gain popular support through budget.
  • Similarly hiking railway fare was major issue, ministers used get feared to increase the fare, which affected in service improvement.
  • The pressure to hold railway passenger fares has skewed the railway fares year after year.
  • Now based on the rationality railway department can hike the charges, in turn it will help to improve the services provided by railways.

Suggestion-

  • Central must consider setting up an independent tariff regulator to keep fares aspect away from politicians.
  • New railway lines and trains should be determined by economic viability rather than the constituencies covered by powerful politicians.
  • here is need to bring new initiatives such as demand-driven clone trains, flexible pricing to boost earnings.
  • Similarly the Railways’ accounts need to be cleaned up and made bankable to ensure accountability.

Conclusion-

Recently central government has scrapped the colonial practice of separate rail budget. At present Indian railways is suffering from various issues. Hence there is an urgent need to bring overhaul reforms. Scrapping the Rail Budget is a goodarting point in this direction.


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