Union Budget 2017: Here is why the Rail and the General Budget 2017 were merged:
It is for the first time in 92 years that the Rail Budget is merged with the General Budget thus making a consolidated Union Budget for the year 2017-18.
Following the British custom of presenting the annual statement, the Budget was hitherto presented in two parts, the Railway Budget and the General Budget.
The above-mentioned facts are not the only deviation in the structure of the budget this year. In the preceding years, the Railway Budget was presented by the Minister of Railways in the third week of February, while the Union Budget was presented by the Union Finance Minister on the last day of February every year. This year, the presentation of the combined Union Budget 2017 was preponed and announced a month before on February 1, 2017. Here are some advantages of the newly combined Union Budget 2017.
1. Do we really need a separate Budget:
The Railways contributed about 85 percent of the annual Budget during the British era. While now it’s contribution has gone down to about 15 percent. The change has been widely applauded by various sectors as having a separate railway budget consumed a lot of legislative hours.
2. Will foster the Legislative process:
The amalgamation of the Union budget and the railway budget will reduce the time involved in implementing the legislative procedures involved in clearing a policy.
3. Funds can be utilised better:
The Capital at charge of the Railways on which annual dividend is paid by the Railways will be wiped off. Consequently, there will be no dividend liability for Railways from 2017-18 while Ministry of Railways continue to get Gross Budgetary support for capital expenditure. This will save Railways from the liability of payment of approximately Rs 10,000 crore as annual dividend to the Government of India which, after adjusting the subsidy in payment of dividend, would give a net benefit of about Rs 5,000 crore to the Railways.
4. Better Planning:
The presentation of a unified budget will help present a holistic picture of the financial position of the Government. The merger of Rail Budget with Union Budget would facilitate multimodal transport planning between highways, railways and inland waterways, and it will allow the Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.