India scraps almost century-old practice of presenting rail budget
Meanwhile, the finance ministry had proposed that the budget will be presented on February 1 as opposed to the current practice of the last working day of February. (Image source: Wikipedia)
New Delhi, Delhi, IndiaSep 21, 2016, 09.00 AM
The Indian government on Wednesday scrapped its 92-year-old practice of presenting a separate Railway Budget.
The Railway Budget will be subsumed under the the annual General Budget, Indian finance minister Arun Jaitley said.
The upside of the amalgamation is that it will allow Indian Railways to save around Rs 10,000 crore every year for not paying the dividend it has to pay for gross budgetary support from the federal government. The dividend it has to pay is because it takes Rs 40,000 crore from the government to facilitate its overhead costs.
The other advantage of the merger is that the Railways' revenue deficit will be shifted to the finance ministry.
The merger will have political ramifications too. The powerful railway ministry is set to lose its sheen in the process, though the proposal for a merger was backed right from the start by the incumbent minister Suresh Prabhu.
Plus, there was always pressure on railway ministers to augment the rail network in the region they hail from. But that practice would possibly end as the consolidated budget is set to be announced by the finance minister.
However, the Indian Railways' "functional autonomy will continue to be maintained", finance minister Jaitley said.
The other important development is that the federal government is planning to announce its annual budget on an earlier date.
The finance ministry wants to present the budget on February 1 as against the existing practice of doing it on the last working day of February.