Among the three, the historic one is merger of Railways Budget with General Budget, which has ended the British legacy that was in tradition for the last 92 years since its inception in 1924.
The Narendra Modi government’s decision to merge the railway budget with the general budget is significant as in recent years, the Railways budget was being used for image building by announcing special trains, new trains, new stoppages, etc by political heavyweights. The trend to woo voters of their areas through Railways was particularly during coalition government after 1996.
With the railway portfolio often held by regional straps, the budget always reflected political priorities of the incumbents, which included Ramvilas Paswan, Nitish Kumar, Mamata Banerjee, Lalu Prasad, etc. The railway bureaucracy has also dug in its heels in the past.
The other important decision taken by Union Cabinet, which is headed by Prime Minister Modi, is in-principle approval to advance the date of General Budget’s presentation in Parliament from the usual February end.
The third important change that has been accepted by the Centre is to do away with Plan/Non-Plan expenditure classification in Budget 2017-18 and replace with ‘capital and receipt’.
To facilitate this, according to officials, the Budget session of Parliament may be called sometime before January 25, a month ahead of the current practice.
Briefing about the Cabinet decisions, Union Finance Minister Arun Jaitley said, “Rail budget and general budget will be amalgamated from now, there will only be one budget.” Jaitley further maintained that the functional autonomy of railways will be maintained.
“Actual date of Budget presentation will be decided after taking into account dates of assembly elections. All proposals on the railways will be included in it. The government will also ensure that there is a separate discussion on the railways each year,” Jaitley said.
Commenting on merger of Railways budget, Railways Minister Suresh Prabhu said, “It’s a historic step taken after matching global benchmark and best practices. It will also help in raising capital expenditure in Railways which will enhance connectivity in the country and boost
economic growth.”
Commenting on its autonomy, Prabhu said, “The functional autonomy and distinct identity of Railways will remain as it is. Our efforts to leverage extra budgetary resources will continue. The merger would also facilitate an integrated and seamless approach towards transportation strategy in the country.”
“The existing financial arrangements will continue wherein Railways will meet all their revenue expenditure, including ordinary working expenses, pay and allowances and pensions etc. from their revenue receipts,” he said