No Rail Budget from next fiscal

According to railways, The Finance Ministry has now constituted a five-member committee comprising senior officials of the Ministry and the national transporter to work out the modalities for the merger. The committee has been asked to submit its report by August 31. 

“I had written to Finance Minister Arun Jaitley for merger of the Rail Budget with General Budget. This will be in the Railway’s interest and also in the nation’s interest. We are working out the modalities,” Prabhu told PTI. 

The public sector behemoth has to bear an additional burden of about Rs 40,000 crore on account of implementation of the 7th Pay Commission awards, besides an annual outgo of Rs 32,000 crore on subsidies. Besides, the delay in completion of projects resulted in cost overrun of Rs 1.07 lakh crore and huge throw-forward of Rs 1.86 lakh crore in respect of 442 ongoing rail projects. If the merger happens, Indian Railway will get rid of the annual dividend it has to pay for gross budgetary support from the government every year. 

According to a senior Railway official, the move to discard the age-old practice of a separate Rail Budget is part of the Modi government’s reform agenda. The keenly sought after Railway Ministry is likely to lose much of its sheen if merger happens.