Cabinet approves merger of Union, Railway Budgets

| Updated on: Sep 21, 2016




From 2017-18, Budget date to be advanced, Plan-non Plan distinction scrapped

In a complete overhaul of the Central Government’s Budgetary process, the Union Cabinet on Wednesday approved three crucial proposals --- to merge the Railway and General Budgets, scrap the distinction between the Plan and Non-Plan Expenditure and advance the date for the presentation of the General Budget to ensure it is completed by March 31.

“The changes will come into effect from 2017-18. There will be a single General Budget,” said Finance Minister Arun Jaitley after the meeting.

Jaitley also said that the Cabinet had taken an in-principle decision to advance the Budgetary process but the exact dates for presentation of the Budget will be taken based on the calendar for State assembly elections.

Regarding the merger of the Railway and General Budget, the Finance Minister said that the distinct identity of the Railways and its functional autonomy will continue.

“The government will take an initiative to ensure there is a separate distinction of railway expenditure in Parliament every year to ensure detailed Parliament scrutiny,” he said.

The capital at charge of Railways, which is estimated at Rs 2.27 lakh crore, will cease to be a liability of the railways and its dividend payments to the Centre will also come to an end, said Jaitley.

Railway Minister Suresh Prabhu said more modalities for the merger will be discussed but said that financial autonomy of the railway officers will continue. He also expressed hope that the merger will help the railways increase its capital expenditure.

Published on January 16, 2018

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