Union finance minister Nirmala Sitharaman will present the Union Budget for the upcoming fiscal year on February 1, outlining India's financial strategy and priorities.
The Union Budget, as it stands today, is a comprehensive document outlining India's expenditure and fund collection, but it was not always structured in this way.
Before 2017, the Railway Budget was a separate entity, a legacy of colonial times. It was only in 2017 that finance minister Arun Jaitley and railway minister Suresh Prabhu merged it with the Union Budget.
Why was Railway Budget merged with the Union Budget
The Railway Budget was separated from the Union Budget over a century back in 1924. It was done following the recommendations of the Acworth Committee. The practice was continued till 2016. The Railway Budget was presented a few days ahead of the Union Budget.
However, in 2016, a NITI Aayog committee headed by Bibek Debroy and a separate paper on ‘Dispensing with the Railway Budget’ by Bibek Debroy along with Kishore Desai recommended doing away with the practice of separate budgets.
Based on the recommendations, the Railway Budget was merged with the Union Budget and Arun Jaitley presented the historic combined budget in February 2017 and the practice continues.
Some of the salient features of the merger were:
- Ministry of Railways will continue to function as a departmentally run commercial undertaking;
- A separate Statement of Budget Estimates and Demand for Grant will be created for Railways;
- A single Appropriation Bill, including the estimates of Railways, will be prepared and presented by Ministry of Finance to Parliament and all legislative work connected therewith will be handled by Ministry of Finance;
- Railways will get exemption from payment of dividend to General Revenues and its Capital-at-charge would stand wiped off;
- Ministry of Finance will provide Gross Budgetary Support to Ministry of Railways towards meeting part of its capital expenditure;
- Railways may continue to raise resources from market through Extra-Budgetary Resources as at present to finance its capital expenditure;
- The presentation of a unified budget will help present a holistic picture of the financial position of the Government;
- Merger of Rail Budget with Union Budget would facilitate multimodal transport planning between highways, railways and inland waterways; and
- It will allow the Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.
Based on the recommendations, the Railway Budget was merged with the Union Budget and Arun Jaitley presented the historic combined budget in February 2017 and the practice continues.
Some of the salient features of the merger were:
- Ministry of Railways will continue to function as a departmentally run commercial undertaking;
- A separate Statement of Budget Estimates and Demand for Grant will be created for Railways;
- A single Appropriation Bill, including the estimates of Railways, will be prepared and presented by Ministry of Finance to Parliament and all legislative work connected therewith will be handled by Ministry of Finance;
- Railways will get exemption from payment of dividend to General Revenues and its Capital-at-charge would stand wiped off;
- Ministry of Finance will provide Gross Budgetary Support to Ministry of Railways towards meeting part of its capital expenditure;
- Railways may continue to raise resources from market through Extra-Budgetary Resources as at present to finance its capital expenditure;
- The presentation of a unified budget will help present a holistic picture of the financial position of the Government;
- Merger of Rail Budget with Union Budget would facilitate multimodal transport planning between highways, railways and inland waterways; and
- It will allow the Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.