It was in 1924, during British raj, that the Railways began to have a separate budget. The decision of the government to announce the Union Budget early (probably the first day of February every year) and merge the Railway Budget with the general budget has been welcomed by most economists. The government will not present a railway budget starting FY18, dispensing with an annual practice that started 92 years ago in the British era.
"With scrapping of the railway budget, the finance ministry may consider cutting short on these concessions," he indicated. Railway Minister Suresh Prabhu claimed that merger of the two budgets will not affect the 'distinct identity' of the railways and its functional autonomy.
"The government will also take an initiative to ensure that there is a separate discussion to the railways expenditure each year so that there is a element of detailed Parliamentary scrutiny and accountability," Prabhu said.
“Beyond the fact that general budget is going to be bigger (post Railway budget merger) and the entire process is going to start early with the budget advancing, there aren’t much changes expected due to the budget overhaul in the economy,” said Devendra Pant, chief economist at India Ratings and Research.
The government will form a committee to look into the aspect of concessions to as many as 53 categories, including senior citizens, sportspersons, freedom fighters and differently-abled among others.
"As far as the burden of concessional fare in different categories including sportspersons and patients is concerned, the government will constitute a separate committee to find out a way forward for it," a senior railway ministry official said.
Congress MP and Leader of Opposition in the Lok Sabha Mallikarjun Kharge said that the merger will create more bureaucratic hurdles for the rail ministry as it would strip it off its financial autonomy.
“Merging the general budget with the railway budget, in my personal opinion is not good, because for everything the railway department will have to go and stand before the finance department. Even in urgent matters also, they will have to seek the permission of finance department.
So, there is no autonomy of finance. Due to this, the railways will be stuck, and the railways is a sensitive department which carries every day more than two to three crore passengers and provides great benefit to the poor,” Kharge said.
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