For decades, the Railway Budget had its own special place on India's financial calendar. It was presented separately. This long-standing tradition came to an end in 2017 when the government decided to merge the two budgets.
Arun Jaitley, then Finance Minister, presented the first combined Budget for 2017-2018, closing a 92-year-old chapter. The idea was to make budgeting simpler and more practical.
Why Railway Budget Merged With Union Budget?
The decision was based on recommendations from a committee led by Bibek Debroy, a member of NITI Aayog, and a separate paper by Debroy and Kishore Desai on "Dispensing with the Railway Budget." The paper was presented to Suresh Prabhu, then Railway Minister, calling for an end to the decades-old practice.
Prabhu later brought up the issue of merging the Railway Budget with the Union Budget. Finance Minister Arun Jaitley addressed this concern in the Rajya Sabha in 2016, later integrating the two budgets.
The main reason for the merger was that a single, unified Budget would give a complete and clear picture of the government's overall finances, instead of looking at railways and other spending separately.
A unified Budget allows better coordination between railways, highways, and waterways for multimodal transport planning.
When the Railway Budget was merged with the Union Budget, several changes and benefits were introduced to make the system simpler.
The Ministry of Railways continues to manage daily operations independently while still getting a separate statement of Budget estimates and demand for grants within the Union Budget.
The Ministry of Finance now prepares one bill for Parliament, known as the Appropriation Bill, which handles all related legislative work. In addition to this, Railways no longer has to pay dividends to the government, and its past capital-at-charge has been cleared.
