Weekly Current Affairs

Railway Budget to be merged with General Budget from 2017 [Governance]

  • The 92-year-old practice of presenting a separate Railway Budget is set to come to an end from next fiscal, with Finance Ministry accepting Railway Minister’s proposal to merge it with the General Budget.
  • According to railways, the Finance Ministry has now constituted a five-member committee comprising senior officials of the Ministry and the national transporter to work out the modalities for the merger.
  • The public sector behemoth has to bear an additional burden of about Rs. 40,000 crore on account of implementation of the 7th Pay Commission awards, besides an annual outgo of Rs. 32,000 crore on subsidies.
  • Besides, the delay in completion of projects resulted in cost overrun of Rs. 1.07 lakh crore and huge throw-forward of Rs. 1.86 lakh crore in respect of 442 ongoing rail projects.
  • If the merger happens, Indian Railway will get rid of the annual dividend it has to pay for gross budgetary support from the government every year.
  • The move to discard the age-old practice of a separate Rail Budget is part of the Modi government’s reform agenda.
  • With the merger, the issue of raising passenger fares, an unpopular decision, will be the Finance Minister’s call.
  • It has been seen that almost every Railway Minister, particularly in coalition governments, has addressed his constituencies by doling out favours by way of new trains and projects.