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Railway budget’s trend is set to end in 2017

Railway minister will now announce the projects after the annual budget is presented

Policy Pulse
Publish Date: Aug 13 2016 1:53PM | Updated Date: Aug 13 2016 1:53PM

Railway budget’s trend is set to end in 2017

There will be no separate railway budget from next financial year, putting an end to a practice that started in 1924. The practice came to an end after 92 years, with the finance ministry agreeing to the proposal to merge the transporter's annual exercise with the general budget.


Government sources said that the finance ministry has constituted a five-member committee of officers to work out the modalities for the exercise, which will end the annual budget speech.


The move is significant as in recent years, particularly since coalition governments post-1996, political heavyweights have used the railway budget to hand out goodies and for their own. The railway portfolio often held by regional biggies, the budget reflected political priorities of the incumbent.


Railway minister Suresh Prabhu is ready and that approach give up the limelight to the subject. BJP is in a position to dump the railway budget as its solid majority in Lok Sabha enabled it to retain the portfolio rather than handing it to an ally.


The move to discard the British-era practice of a separate rail budget by the Modi government comes after a two-member committee comprising Niti Aayog member Bibek Debroy and Kishore Desai recommended the exercise be scrapped.


Prabhu said in Rajya Sabha that he has also asked finance minister Arun Jaitley to merge the railway budget with general budget in long-term interest of national transporter as well as the country's economy.


Once the rail budget is merged with the general budget, railways will be like any other government department that receives budgetary support but comes under the finance ministry's oversight as far as spending and earnings are concerned.