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September 21, 2016

Important : Railway Budget merged with Union Budget

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Friends, the Union Cabinet today approved the scrapping of the 92-year old practice of presenting Railway Budget and merged it with the Union Budget. This means, there will be no separate railway budget from the next financial year (2017). This merger would lead to presentation of a single Appropriation Bill, including the estimates of Ministry of Railways, thereby saving precious time of Parliament by not having to hold separate consideration and passing of two Appropriation Bills.

Further, the Cabinet also approved the advancing of the date of presentation of the Union Budget, which is currently presented on the last working day of February. 

The Railway Budget was separated from the general government finances in the year 1924. The measure was taken on the recommendations submitted by a panel led by British economist William Acworth in 1920-21. 

The move to discard the British-era practice of a separate rail budget by the Modi government comes after a 2-member committee comprising Niti Aayog member Bibek Debroy and Kishore Desai recommended the exercise be scrapped. This committee on restructuring of the Ministry of Railways had recommended that having a separate railway budget should be phased out, merging it with the General Budget.

The Cabinet also approved removal of distinction between Plan and Non-Plan expenditure as the present classification resulted in excessive focus on former with almost equivalent neglect to items such as maintenance which are classified as non-Plan. The Cabinet felt it is the total expenditure, irrespective of Plan or Non-Plan, that generates value for the public. Plan expenditure was for the first time presented separately in the budget for 1959-60.

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