The cabinet has announced that Railway budget and General budget will be merged for year 2017-2018.Suresh Prabhu will be the last railway minister to have presented a Budget and Jaitley will be the first finance minister to present a combined one next year.
“The government is in favour of advancing the Budget date. However, a number of states are going to the polls early next year. We will take a call on a new date after studying the election calendar,” Finance Minister Arun Jaitley said at a press conference after the Cabinet meeting on Wednesday.
“India was the only country with a separate Railway Budget. We are breaking that tradition. However, the financial powers of the railways will stay. We will not have to pay a dividend of about Rs 10,000 crore annually. We will also be able to increase our capital spending,” Prabhu said, at the press briefing.
“There will be a separate discussion on the expenditure of the railways in Parliament every year, so that accountability remains,” Jaitley said. Issues like pension liabilities, dividend and gross budgetary support are yet to be decided. A call on these will be taken closer to the presentation of the Budget.
“Expenses of the railways are met by the carrier through its revenue. This practice will continue. Railway borrowings will continue to be government loans,” Economic Affairs Secretary Shaktikanta Das said.
The tradition of presenting a separate Railway Budget began in 1924 when expenditure on the railways was higher than general government spending. Now situation is different.
“This is a historic step, matching global benchmark and best. This will help raise capital expenditure in Railways which will enhance connectivity in the country and boost economic growth,” Prabhu said, adding: “Our effort to leverage extra budgetary resources will continue.”