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Union Government Approves The Merging Of Railway Budget Into Union Budget Which Ends 92 Years Of Practice

rail budget

From the next year 2017 there will be an end to the 92 year’s practice of separate rail and union budget which started in 1924. The Union Government Tuesday gave the decision to merge the railway budget with general budget.

The employees of the Indian Railways also welcomed the decision, said it would help railways to recover from financial trouble. At first NITI Aayog member Bibek Debroy thought about the idea of merging the two budgets.

After the cabinet meeting, Finance Minister Arun Jaitley said that from now on there will be only one budget but “the functional autonomy of railways will be maintained”.

arun jaitley

General Secretary of All India Railwaymen’s Federation (AIFR), Shiva Gopal Mishra stated that the government welcomed the move and the merger would save the time of parliament. He stated, “This will help railways, if finance ministry also takes up its subsidy burden, pension liabilities and if there is a waiver on dividend front.”

The Cabinet headed by PM Narendra Modi approved advancing the date to present the budget by a month to get all the legislative approvals for the annual spendings before the beginning of the new fiscal year. From the next financial year the budget session will be called before January 25 instead at the end of February.

In the British period, having two separate budgets made sense as in that time a larger revenue has come from the railway and the GDP dependent on it. But now the revenue from railway continued to go lower.

There are some advantages and disadvantages of this decision

Advantages:

Time save

From next fiscal year railway budget will be introduced with union budget so it will save more time of parliament. The separate budget means there will be more drawbacks and hindrances which the railway ministry have to face before a solution has taken.

Loss of revenue

Indian Railway is running on loss. Most of the funds are wasted when a regional MLA demands more fund due to his promise of new trains and stoppages in his region which he made at the time of election. But when the finance ministry will deal with just one budget then there will be more commercialized distribution of the resources.

Less politics

Ministers and minority parties always fight and argue over the new railways, trains for their own region which has been a result of ultimate mess. But after the decision, Centre will decide all these things and there will be less political pressure on the budget.

No annual dividend

Railways has to pay Rs 10,000 crore as dividend a year after getting Rs 40,000 crore. After the merging it will not have to pay this dividend and could use the money for better purposes or development.

Disadvantages:

End of privatization

Earlier, the decision about privatization of railways for its betterment didn’t receive nods. After the merger there will be a forever end of the privatization of Indian Railways as now its completely in the hands of government.

Graph of the union budget

According to the rise and fall of the budget the finance ministry distributes the funds to different departments. Which means a fall in the budget will also affect the distribution of funds in the railway department.

Lesser hike of price

If the ruling party for the sake of vote banks will not hike the price to win in an election then it would be a greater loss to Indian Railways.

Lesser attention to the railway department

The exhausted nature of the government departments are well known. No one gives the attention to their responsibilities. In that case, after the merging if the Railways will face the similar problem then the result would be awful.

Now the time will tell it would be an advantage or disadvantage for Indian Railways.

Suchismita Biswas
Suchismita Biswas
Pen is mightier than swords - these words make me passionate about writing. Except writing I love to travel , love to explore the unknown places, love photography and love listening to music. Also I am an avid reader of books. I'm a simple girl but I am what I am.

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