Union Budget 2019 | Why was the Railway budget and the Union budget merged in 2017?

Since 1924, during the British colonial era, the critical Railway Ministry had a different budget which was presented separately from the Union Budget. But, on September 21, 2016, the previous Modi Government decided to merge both the Union Budget and the Railway Budget from the financial year 2017-2018, based on the recommendations of the committee chaired by Bibek Debroy, Member of NITI Aayog. Another factor affecting the decision was the paper published by Debroy and Kishore Desai titled- ‘Dispensing with the Railway Budget’. 

A separate committee with representatives from the Ministry of Finance and Ministry of Railways examined the issues involved and then worked out the procedural details to go about with the proposed merger. Following this tradition, Union Finance Minister Nirmala Sitharaman will present the Union Budget for 2019-2020 in the Parliament on Friday.

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What are the advantages of the merged budget?

•  With the merger, the Ministry of Railways continued to function as a departmentally run commercial undertaking.
•  A separate Statement of Budget Estimates and Demand for Grant was created for Railways, retaining the autonomous nature of the Railway budget. Furthermore, an Appropriation Bill, including the estimates of Railways, was prepared and all legislative work connected therewith was handled by the Ministry of Finance, eliminating the budget hassles faced by the Railway ministry. 
• Railways also received an exemption from payment of dividend to General Revenues and its Capital-at-charge was wiped off, reducing the Railways debt.
• While the Ministry of Finance provides Gross Budgetary Support to Ministry of Railways towards meeting part of its capital expenditure, the Railways was allowed to continue raising resources from the market through Extra-Budgetary Resources, giving additional support to the Railways' cash kitty.
• The presentation of a unified budget helps to present a holistic picture of the financial position of the Government giving the Finance Ministry a greater elbow-room at the time of mid-year review for better allocation of resources
• The merger of Rail Budget with Union Budget facilitated multimodal transport planning between highways, railways and inland waterways, paving the way for cross-ministerial infrastructure projects.

(With Inputs from PIB)

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