Jun 22, 2016

NITI Aayog explores possibilities of merging Rail Budget with General Budget

New Delhi: The Central government is thinking about doing away with a separate Rail Budget. After railway minister Suresh Prabhu stripped the last two Rail Budgets of populism, serious deliberations are underway to merge the financial aspects of railways with the General Budget presented by the finance minister.
“The PM has sought a plan paper on the road-map to merge the Rail Budget with the General Budget. NITI Aayog has been tasked with the exercise and been given a month’s time to submit the plan paper. Consequently, NITI Aayog has begun consultations with the Railway Ministry and other stakeholders,” said a source.

With the railways carrying more than 2 crore passengers each day, besides moving more than a billion tonne of freight annually, it has, over the decades, commanded strong political aura. “Since Mr Prabhu has done away with the politics involved in the Rail Budget by stopping announcements of hundreds of new trains and projects, the Rail Budget has of late been essentially financial papers, which could well be accommodated in the General Budget,” added a source.

Sources revealed that Mr Prabhu has already held consultations with the vice-chairman of NITI Aayog, Mr Arvind Panagariya, regarding doing away with the Railway Budget.

Mr Prabhu is in support of the move and has stated the same to the PM too, said sources close to the development. The move to do away with a separate Rail Budget is being seen within the government as part of the reform process and to allow the Railways to function as a professional entity with minimum political interference.

“Since the constitution of the Rail Tariff Authority is also in the offing, the railways has to migrate from an entity run from New Delhi with a top heavy bureaucracy to autonomous zonal units with business development orientation. The delegation of powers to the zonal heads of the railways along with structural reforms at the top should allow the government to do away with the need for a separate Rail Budget,” sources said.

Former PM Manmohan Singh too had favoured doing away with the exercise of a separate Rail Budget. The Rail Budget, however, gives the Ministry of Railways a place of pride among the other ministries.