Joint Budget to keep Railways out of politics

New Delhi: The historic decision of merging the Railway Budget with the general Budget for the first time since 1924 was apparently done to stop politicisation of the sector. However, the government’s contention was dismissed by Opposition parties and former Railway Ministers, who questioned the rationale behind the move.

Traditionally, Railway ministers had used the Budget to announce new trains to connect places seen to be politically important for the then government. The practice of announcing new trains was stopped last year itself with the government focusing on improving Rail finances.

Railway minister Suresh Prabhu said the Budget was growth oriented for the Railways with a capital investment of Rs 1.31 lakh crore for the next fiscal year and a dedicated safety fund called Rashtriya Rail Sanraksha Kosh of Rs 1 lakh crore over the next five years. The capital expenditure for the Railways includes Rs 55,000 crore gross budgetary support from the government to ensure faster execution of projects of new lines and upgrading the existing ones. For the safety fund, the government will provide seed capital with the balance resources to be arranged by the Railways from their own revenues and other sources.

Finance minister Arun Jaitely began his Budget speech on Wednesday by listing the merging of the two Budgets as one of the three major reforms in the Budget document this time.

“The merger …is a historic step. We have discontinued the colonial practice prevalent since 1924. This decision brings the Railways to the centrestage of the government’s fiscal policy, and would facilitate multi-modal transport planning among the Railways, highways and inland waterways,” Mr Jaitely said.

Mr Prabhu also said that it was just a “colonial pratice”, and no other country in the world had a separate Budget for the Railways.

“Railways’ functional autonomy will continue. It was a legacy, and nowhere has the railway a separate budget. Now there will be an integrated approach to transportation, including rail, road, aviation and waterways.”

Mr Prabhu said that the Railways will no longer pay dividends to the finance ministry after the merger, and is likely to save Rs 9,500 crore.

Both ministers highlighted the fact that the Railways would benefit from the merger, and the decision will boost the overall infrastructure sector.

A record plan outlay of Rs 1.31 lakh crore was announced against Rs 1.21 lakh crore planned for 2016-17. The finance ministry will provide a gross budgetary support of Rs 55,000 crore to the Railways in 2017-18. For the first time after the merger, the Railways will not be required to pay annual dividend of around Rs 9,000 crore to the finance ministry beginning 2017-18.

However, former Railway ministers questioned the rationale behind the move arguing that it was the only means available to help the common man.

West Bengal chief minister Mamata Banerjee, a former Railway minister, said: “The grand design turned out to be a damp squib. This will damage the very core of the transport system.”

Former Railway minister Lalu Prasad was particularly harsh. “They have demolished the tradition of presentation of a separate Rail Budget... What is the rationale of continuing with a Railway minister when he cannot present the Budget of his ministry,” he asked.

Both leaders had during their time as Railway minister announced a slew of trains to cater to their constituencies.