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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Separate rail budget: Do India needs separate rail budget? Discuss.
Jun 23, 2016 Related to : GS Paper-2

Ans :


Budget of Government of India has been divided into the Railway budget and the General budget. The budget of the Indian railways is presented separately to Parliament and dealt with separately, although receipts and expenditure of the railways form part of Consolidated Fund of India. The figures relating to them are included in the Annual Financial Statement of India.

In news/ Issue-

Recently NITI Ayog has recommended for doing away with the separate railway budget and suggested to make it as part of general budget. Earlier, even committee headed by Bibek Debroy also recommended the same, i.e scrapping of separate railway budget.

Why separate Railway budget needs to be scrapped?

Arguments in favour-

  • Railway budget has become political tool in the hands of politicians to announce populist measures.  Successive railway ministers have used the annual budget to play populist politics announcing new projects irrespective of its viability.
  • Similarly it has become populist avenues for MPs demanding new trains and opposing hikes in train fares. An opaque system of cross-subsidies has led to substandard passenger services and over-priced freight transport. In this context, the annual rail budget perpetuates the status quo.
  • Unlike general budget (annual financial statement), there is no constitutional or legal requirement for separate railway budget. A lot of resources are wasted in the process of preparing railway budget.
  • If railways need to function according to commercial principles then decisions should be left to railway board. The decision cannot and should not be left to Parliament.
  • Hence Railway budget needs to scrapped and should be brought into the fold of the general budget. It will be an important step in a series of measures to enhance the performance of Indian railways.

Counter arguments-

  • By bringing railway budget into the fold of annual budget, railways need to wait for annual budget for any changes.
  • Railways cannot afford such long wait. It needs to react more swiftly, and with greater flexibility, to the rapid changes afoot in the wider economy, be it in terms of raising or lowering fares, adapting to new technologies or improving safety standards.
  • Even though Indian Railways is a state monopoly it faces increasingly tough competition from roads and civil aviation. To compete with them it needs separate budget system.
  • Scrapping separate budget would de-emphasise the annual spectacle, allow more ad-hoc approaches in its handling. Hence railway budget must not be scrapped.


Separate railway has its own advantages and disadvantages. But its disadvantageous overweighs the advantages. Separate railway budget is waste exercise and most of the times it was used to gain political mileage.  Like many other department railway is also part of union exercise, hence it is better to scrap separate railway budget, and it should be brought under the fold of general budget.

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