Railway Budget will cease to be presented separately from 2017

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The railway budget’s long practice of holding a separate budget meet is about to come to an end. From the next financial year, the annual budget of the Indian Railway will be merged with the Union Budget of India. The finances of the Indian Railways had been separated from general government finances since 1924 following the recommendation of British railway economist William Acworth.


The move to merge the two budgets proves to be an important political development, as it marks a break from the past traditions of coalition governments after 1996; since then, political figures have used the railway budget for their own purposes of image building. With the railway portfolio often held by regional biggies, the budget often reflected their own political priorities and agendas.

This separation initiated by the Modi government has come after a committee comprising of Niti Aayog member Bibek Debroy and Kishore Desai recommended that the exercise is done away with altogether. Railway Minister Suresh Prabhu, who presented the Railway Budget this year on February 25, had told the Rajya Sabha on Tuesday that he has asked Finance Minister Arun Jaitley to merge the railway budget with the general budget, keeping in mind the interest of the country’s long-term economic development as well as that of the railway system. He will now announce his projects after the annual budget is presented.

Upon the merging of the two core budget statements, the railways will be functioning the same way as any other department under the government that receives budget support, but in the case of spending and earnings, comes under the finance ministry’s oversight. Once the overall funds are allocated, the railway department will then proceed to keep them segregated for various purposes. Several sources have indicated that the model will be similar to the one for the postal department.

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