Ending 92-year-old tradition, the Cabinet today decided to merge rail budget with the general budget and agreed in-principle to advance the date of its presentation in Parliament from the usual February end.
The actual date for presentation of the general budget for 2017-18 will be decided by the government after taking into account the ensuing assembly elections, Finance Minister Arun Jaitley said while briefing the media about the Cabinet decisions.
The Cabinet has also decided to do away with the Plan/ Non-Plan expenditure classification in Budget 2017-18 and replace with 'capital and receipt'.
The government, Jaitley said, was in favour of advancing the budgetary exercise to that it could be completed before March 31 and expenditure on public-funded schemes could begin from April 1.
He said: "While we in-principle are in favour of advancing the budget date and finishing the entire financial business before March 31...the actual dates will be decided after consultations depending on calendar of the state elections."
The government, he added, is keeping itself in a "state of readiness" to advance the Budget presentation. As per tradition, the Budget is presented on the last working day of February. A separate railway budget was started by the British in 1924.
Economic Affairs Secretary Shaktikanta Das said the Central Statistical Organisation (CSO) will provide provisional Advance Estimates of national income or GDP by January 7 so that the data can be incorporated in preparation of Budget.
The provisional advance estimates, he hoped, would be in line with the one normally released by February 7.
Das said the government will issue Budget circular in a day or two.
Rail Minister Suresh Prabhu said the merger of rail and general budgets will not impact the functional autonomy of the railways but help in enhancing capital expenditure.
"One single budget will mean railway and general budget will work in harmony," Prabhu said, adding Railways will not have to pay dividend to the Government. 

Railways to have functional autonomy

Railways will no longer have to pay annual dividends to the exchequer and maintain its functional autonomy after merger of Rail Budget with General Budget. Railways will bear the burden of 7th Pay Commission, besides the regular salary and pension payments for its present and ex-employees. At present, the wage bill of railways is around Rs 70,125 crore and pension bill is about Rs 45,500 crore while the annual fuel bill is more than Rs 23,000 crore. Railways has to also bear an additional burden of aroundRs 30,000 crore on account of implementation of the 7th Pay Commission awards, besides an annual outgo of Rs 33,000 crore on subsidies for passenger service. In a major budgetary reform, a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, today approved the merger of Rail Budget with General Budget. However, railways will maintain its separate identity and functional autonomy, Railway Minister Suresh Prabhu said. As far as the burden of concessional fare in different categories including sportspersons and patients is concerned, the government will constitute a separate committee to find out a way forward for it. The existing financial arrangements will continue wherein railways will meet all their revenue expenditure, including ordinary working expenses, pay and allowances and pension from their earnings. The presentation of a unified budget is expected to bring the affairs of railways to centre stage and present a holistic picture of the financial position of the government. However, railways will not have to pay about Rs 9700 crore as dividend from the next fiscal though it will still receive gross budgetray support from the exchequer. The capital-at-charge of the railways estimated at Rs 2.27 lakh crore on which annual dividend is paid by the national transporter, will be wiped off. The capital-at-charge represents the central government's investment in railways by way of loan capital and value of the assets created therefrom. Railways will continue to maintain its distinct entity -- as a departmentally run commercial undertaking as at present. The national transporter will retain its functional autonomy and delegation of financial powers as per the existing guidelines. The merger is also expected to reduce the procedural requirements and instead bring into focus, the aspects of delivery and good governance. Consequent to the merger, the appropriations for railways will form part of the main Appropriation Bill.


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