Indian Railways

It’s curtain likely on 92-year-old tradition of tabling Railway Budget in 2017

Railway Budget in 2017 will not be presented separately in the Parliament, but will be merged with the General Budget, media reports on Tuesday said. The development comes following the approval of a proposal forwarded by Railway Minister Suresh Prabhu to the Finance Ministry in which he had asked to put an end to the 92 year-old tradition of presenting a separate Rail Budget.
Finance Minister Arun Jaitley has accepted Prabhu’s proposal and formulated a five member committee, comprising senior officials of both the concerned ministries, to look into the modalities for merging the Rail Budget with the General Budget. The committee will submit its report on the proposed merger by August 31, reports stated.
According to reports, the railway minister himself confirmed the news about the proposed merger to the media and said that the move ‘will be in the Railway’s interest and also in the nation’s interest’. The merger will relieve the national transporter of the annual dividend it has to pay to the government in order to avail Gross Budget Support every year.
The Economic Times reported that the annual dividend paid by the Indian Railways comes to around Rs 10,000 crore. Being the largest employer in the country, it is also liable to pay Rs 40,000 crore annually for higher salaries, pensions and allowances recommended by the 7th pay commission. The above amount is in addition to Indian Railways’ annual expenditure of Rs. 32,000 crore on subsidies.
Currently, Indian Railways is suffering from a huge revenue deficit which will be transferred to the Finance Ministry once the merger happens and the contentious issue of raising train fares will be the finance minister’s call.
The revenue and expenditure of the Railway will become part of the general revenue after the merger. According to a top official of the All India Railwaymen’s Federation, the autonomy of Indian Railways might also end after the merger.
The Railway Budget was separated from the Union budget in 1920-21 on the recommendation of British railway economist William Acworth and is presented few days ahead of the General budget in the Parliament every year.