Rail Budget and General Budget Merger


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