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Consolidated budget okayed
The Finance Minister said over the years, the budget dynamics had undergone a sea change, with some ministries like Defence having more outlays than Railways.
​New Delhi : In a significant financial sector reform, India on Wednesday decided to bid adieu to three British-era legacies the 92-year-old practice of separate general and rail budgets by unifying them, ending the distinction between plan and non-plan expenditures and advancing the presentation date in Parliament from the last week of February.
"From the coming year, the Railway and the General budgets will be amalgamated. There will be only one budget. Secondly, the distinction between plan and non-plan expenditure will be ended from next year. Consequently, there will be only one appropriation bill," Finance Minister Arun Jaitley said here after a cabinet meeting.
The Finance Minister said over the years, the budget dynamics had undergone a sea change, with some ministries like Defence having more outlays than Railways. "We will also complete the twin-budgetary exercise before March 31," he said, alluding to the decision to also advance the date of tabling.
The decision to merge the two budgets, officials said, was mooted by Railway Minister Suresh Prabhu and endorsed by official think tank NITI Aayog which also proposed the doing away of the distinction between plan and non-plan expenditure. The decision on the merger of two budgets will also save Indian Railways Rs 9,700 crore it pays as dividend to the exchequer.
Both Jaitley and Prabhu, during the press briefing, said the distinct identity of the Indian Railways will be maintained -- including the freedom to raise resources via extra-budgetary means and fix tariff. "Functional autonomy of the Railways will be maintained," Jaitley said. "The government will also take an initiative to ensure there is a separate discussion on Railways during the Budget Session," he added.
"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."
The Railways has seen a separate budget since 1924 when the British thought it necessary to focus on India's most important infrastructure network. The Railways then accounted for 70 per cent of the total budget now pared down to just 15 per cent, on an average, of the country's overall budget, the size of which was around $300 billion for this fiscal.
