The Indian Rail Budget Is History – It’s The End of An Era

The Indian Rail Budget was one of the constants of Indian polity – presented each year a few days before the presentation of the actual national budget, it was a kind of precursor to the big one which would trigger discussions, analyses, commentaries, criticism and more. It is now decided that India will no longer have a rail budget. We look at why the rail budget was significant and whether its cessation will have an impact if any.

The Railway Budget was first recommended by British railway economist William Acworth in 1920-21. As a result the railway finances were separated from the general government finances and reorganised.

After the first Rail Budget was presented in 1924, the practice continued in independent India as well.

After nearly a century, India will no longer have a separate rail budget. It will be clubbed with the regular budget presented each year.

This budget presented by Railways Minister Suresh Prabhu was the last one. For the first time after 92 years the the regular budget will now include the rail budget.

Several reasons are cited: with the budget merger, the Indian Railways will save on the amount it had to pay as budgetary support to the government of India. Also the railways share of the general budget has reduced over time; a separate budget is no longer required.

One of the proffered reasons for discontinuing the rail budget was its potential for misuse – successive ministers in charge of railways used their office to further and promote their own image via their budget and also utilized the platform for pushing various populist agendas.

There are other financial implications: the railways will be relieved of the burden of major expenses relating to fuel expenditure, salaries and pensions. In light of the 7^th pay commission recommendations this is even more significant.

… to be the life line of India, connect us to remote places and “bring us all together”… we just won’t have a rail budget anymore.