Hyderabad: Railways play a very crucial role in everyone's life. It helps you to travel from one place to another.
To keep it moving the government of India allocates a major share of its budget for the development and sustainability of the Indian Railways.
But do you know that the Rail Budget was earlier presented separately? It merged with the General Budget in 2017.
From 1924 till 2016, the Railway Budget was presented separately by the Union Railway Minister.
However, the Modi government decided to merge the Railway Budget with the General Budget in September 2016. The proposal for the same was approved by the cabinet, ending the 92-year-old practice.
Suresh Prabhu presented the last Rail budget on 25 February 2016. Whereas Arun Jaitley became the first Finance Minister to present the combined budget on February 1, 2017.
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From the 1860s to 1920 only a single budget was presented. But the share of railways increased in the budget, making it necessary to be separated in 1924.
In the year 1921 the Acworth Committee with 10 members was constituted. It was headed by British Economist Sir William Mitchell Acworth. The committee proposed to separate rail budget from the General Budget.
The proposal was approved in the year 1924.
The reason given behind this was that the railways alone has a 70% share of the economic development of the country.
In these 92 years, sectors like defence, road and transport, highways, petroleum and natural gas had overtaken the spending of Indian Railways leading to the demand and proposal of merging the railway budget back into the General Budget.
The then NITI Aayog member Bibek Debroy headed committee proposed to end the process of presenting railway budget separately.
After which in the second week of August 2016 the finance ministry constituted a five-member committee and asked the committee to submit a report by 31st August and finally merged the two budgets.
Benefits of the merger to Railways:
- Get the required budget allocation from the government
- Will not have to pay an estimated Rs 9,700 crore to the centre as an annual dividend for gross budgetary support
- The capital charge of Rs 2.27 trillion will be wiped off
