Proposal to scrap railway budget being considered: govt

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New Delhi: The finance ministry on Friday said that it is considering suggestions made by the Bibek Debroy-led expert committee that recommended phasing out the practice of a separate railway budget.

Last month, railway minister Suresh Prabhu wrote to finance minister Arun Jaitley seeking scrapping of the 92-year-old practice of having a separate budget for the Indian Railways

Niti Aayog member Debroy, in his report on restructuring the public transport behemoth, recommended that the railway budget should be phased out progressively and merged with the general budget.

In the report submitted last year, Debroy had argued that there is no constitutional or legal requirement for a separate railway budget and stated that a lot of resources are wasted in the process of preparing the railway budget, resulting in a very complicated relationship between the finance ministry and the Indian Railways, which needs to be simplified.

“The recommendations of the committee are being examined by this ministry, in consultation with the ministry of railways,” said minister of state for finance Arjun Ram Meghwal while replying to a query in the Lok Sabha on Friday.

The railway ministry is also concerned about the implementation of the 7th Pay Commission award, which has recommended a 23.6% hike in salary of central government employees and pensioners. The recommendations will increase its wage bill by almost half, from Rs.53,000 crore to Rs.77,325 crore in 2016-17, putting significant stress on its already weak finances.

Merging the railway and Union budgets would mean that the Indian Railways will not have to separately bear the burden. The railway budget size is quite small at Rs.1.21 trillion compared to India’s overall budget of Rs.19.8 trillion.