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Rail Budget Now Part of General Budget
Sep 26, 2016

Ending a 92-year-old practice, the government will not present a separate rail budget from the next financial year. The Cabinet recently approved the merger of the rail budget with the general budget along with an in-principle agreement to advance the presentation date of the budget in Parliament from the usual last working day of February.

  • The NITI Aayog committee for it had observed that presenting a separate railway budget is only a ritual even though its size has become very small compared to the general budget. He said the government will continue to maintain the distinct identity of the railways and its functional autonomy.
  • The Cabinet has decided that rail budget and general budget will amalgamate. There will be only one budget, which will be the general budget and all proposals with regard to the railways will be part of the general budget. Consequently, there will be only one appropriation bill.
  • The Cabinet also decided to remove the classification of plan and non-plan expenditure in the budget 2017-18 along with the decision of no dividend by railways from the next financial year.
  • One of the enabling steps for the advancement would be the decision of the Central Statistics Office (CSO) to provide the Finance Ministry with provisional advance estimates of national income or GDP by January 7 so that they can incorporate the data in preparation of the budget.
  • The provisional GDP advance estimate is likely to be in line with the final advance estimate, which is usually released by CSO in February.
  • To decide the passenger fares and freight rates, the decisions will continue to be taken by the Railways.
  • The accounts of railways will be presented to Parliament by the Finance Minister.
  • Presentation of statement of accounts will be consolidated, so there will be a horizontal merger of the two accounts.
  • Railways meets its expenditure, including payment of salary and pension from its income and there would be no change in this because of the merger of accounts with the general budget.
  • The Centre will continue to provide subsidy which it has been giving to the railways.
  • A joint committee set up to finalise the modalities for the merger of the rail budget with the general budget in its report this month had recommended various changes including waiving the payment of dividend by the railways and continuation of gross budgetary support.

Till now, Rail Budget is the Annual Financial Statement of the state Indian Railways which handles rail transport. It is presented every year by the Minister of Railways, representing the Ministry of Railways in the Parliament.It is presented every year a few days prior to the introduction of the Union Budget of India. The Union Budget of India is always introduced on the last working day of the month of February.


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