Rail Budget and General Budget Merger [ Current News (Concise) ]


The Union Cabinet has approved the proposals of Ministry of Finance to merge of railway budget and general budget. It will came in the effect from the Budget 2017-18.92-year-old tradition that was started in year 1924 will come to an end. Since then the tradition was followed as a convention rather than under Constitutional provisions.

Administrative and Financial Arrangements

  • It will continue as a departmentally run profitable undertaking to maintain its distinct entity as at present.
  • It will keep its functional autonomy and allocation of financial powers etc. based on the current guidelines.
  • Its current financial arrangements will continue wherein it will meet the revenue spending from revenue receipts.
  • The capital at charge valued at 2.27 lakh crore rupees which Railways pays on annual gain will be abolished.
  • From 2017-18So Railways will not have an allowance liability.
  • Along with this the Union Ministry of Railways will also get Gross Budgetary support.
  • Now Railways will not have to pay annual dividend of around 9,700 crore rupees to the Central Government.

Benefits of merger

  • This move will take the affairs of the Railways to centre stage.
  • The merger will bring a holistic picture of the financial position of the Government.
  • The procedural requirements will decrease and focus on the aspects of delivery and good governance will be increase.
  • Financial gain to railways

- Published/Last Modified on: September 22, 2016