No Rail Budget from now

Sanjeev Sharma

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Tribune News Service

New Delhi, September 21

There will be no separate Railway Budget from the next financial year as the Union Cabinet today decided to merge it with the General Budget, besides advancing the date of Budget presentation from the last day of February to around a month earlier.

The Cabinet also decided to remove the distinction between Plan and the Non-Plan Expenditure by merging the two in the Budget accounts. All these changes will be put into effect simultaneously from the Budget for 2017-18.

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Scrapping the Railway Budget marks the end of a 92-year-old tradition that began in 1924. An official statement said: “It (Railway Budget) has continued after Independence as a convention rather than under Constitutional provisions.”

While the Cabinet has decided in principle on advancing the Union Budget date, Finance Minister Arun Jaitley said the actual date for the Budget presentation would be decided by the government after taking into account the calendar of Assembly elections in 2017.

Jaitley said a separate Railway Budget was started as the capital expenditure on the Railways was very high. Gradually, the ratio as compared to the General Budget has been going down and currently some departments, including defence and road transport and highways, have a very high outlay and expenditure. After the merger, appropriations for the Railways will form part of the main Appropriation Bill.

Experts said this would ease pressure on the Railways. Abhaya Agarwal, Partner and PPP Leader, Ernst & Young, India, said, “With one collective Budget, there would be less pressure on the Railways to focus on stabilising tariffs or increasing the number of trains each year, besides more political freedom to take up challenging projects.”

The government is in favour of advancing the budgetary exercise so that it can be completed before March 31 and the taxation measures and expenditure on public-funded schemes could begin from April 1.

“At present, the exercise is completed by May, after which the monsoons start and the actual expenditure starts only by September-October,” Jaitley said. The new arrangement would enable ministries and departments to ensure better planning and execution of schemes from the beginning of the financial year.

The existing financial arrangements would continue wherein Railways would meet all its revenue expenditure, including ordinary working expenses, pay and allowances and pensions, from their revenue receipts. The capital at charge of the Railways, estimated at Rs 2.27 lakh crore, on which annual dividend is paid by the Railways will be wiped off. Consequently, there will be no dividend liability for the Railways from 2017-18. This will save the Railways from paying around Rs 9,700 crore to the Centre annually.