1. You Are At:
  2. Home
  3. Business News
  4. Budget News
  5. Railway Budget 2018: All you need to know

Railway Budget 2018: All you need to know

Even as the stage is set for the last full-fledged budget of the Modi Government, the people have their hopes pinned on the Government for a budget that could match their expectations.

Written by: Nidhi Taneja, New Delhi [ Updated: February 01, 2018 11:56 IST ]
Representational image

Merged with the Union Budget in a historic reform measure in 2017, the Railway Budget for Financial Year 2018-19 is all set to be presented by Union Finance Minister Arun Jaitley in the Parliament on February 1.

Both the Union Budget and the Railway Budget for Financial Year 2018-19 will be politically crucial for the Narendra Modi government as it will have a significant impact on the upcoming assembly elections scheduled to take place in some of the big states this year.

Union Budget 2018-19 LIVE Streaming: When and where you can watch FM Jaitley's speech 

The common man has high expectations from this year’s Rail Budget especially over safety of passengers.

In the year 2017, the Indian Railways was marred by a number of controversies ranging from a huge spike in train accidents to deeming of the food served in Asia’s oldest rail network ‘not fit’ by the country’s Comptroller and Auditor General (CAG).

Commuters are looking forward to better infrastructure, facilities and food while they travel in trains. For train passengers, the issue of their safety and security has become a bigger concern compared to the ticket- pricing.

Even as the stage is set for the last full-fledged budget of the Modi Government, the people have their hopes pinned on the Government for a budget that could match their expectations.

For upgrading facilities for commuters, the  Railways is likely to get a shot in the arm with a budget provision of over Rs 3,000 crore for installing about 3,000 escalators and 1,000 lifts at all major urban and suburban stations across the country.

Also Read: What is Union Budget: Here’s all you need to know

All about Rail budget

# Rail Budget is an annual financial statement that shows estimated receipts and expenditures related to the Indian Railways in the coming financial year. Breaking away from tradition, the Rail Budget was merged with the Union Budget last year and will be presented together for the second time now.

# In 2017, the Railway Budget was merged with the Union Budget, putting an end to the 92-year-old tradition of presenting it separately. Procedural details were worked out and issues examined by a committee of representatives from Ministry of Finance and Railways.

# A committee led by Niti Aayog member Bibek Debroy on restructuring of the Ministry of Railways had recommended that the British-era legacy of having a separate railway budget should be phased out, merging it with the General Budget. Their report stated that presenting the Rail Budget separately was not required as its size appears to have shrunken when compared to the overall general budget.

# A combined budget also means that the dividend which the Railways used to pay to the Government for getting gross Budgetary support, is done away with. In turn, this saves a huge amount of the financial resources of Railways.

# This not just saves money of the Railways, but also time of parliamentarians by not having to approve and pass two separate bills. Earlier, this used to consume a lot of time but now with the merger, things have become quite simplified.

Features of the merger

# Ministry of Railways continues to function as a departmentally run commercial undertaking.

#   A separate Statement of Budget Estimates and Demand for Grant is created for Railways.

#  A single Appropriation Bill, including the estimates of Railways, is prepared and presented by Ministry of Finance to Parliament and all legislative work connected therewith is handled by Ministry of Finance.

# Railways get exemption from payment of dividend to General Revenues and its Capital-at-charge stands wiped off.

# Ministry of Finance provides Gross Budgetary Support to Ministry of Railways towards meeting part of its capital expenditure

# Railways may continue to raise resources from market through Extra-Budgetary Resources as at present to finance its capital expenditure

# The presentation of a unified budget helps present a holistic picture of the financial position of the Government

# Merger of Rail Budget with Union Budget facilitates multimodal transport planning between highways, railways and inland waterways

#  It allows Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.

History of Rail budget

# The tradition of presenting the rail budget separately was a colonial era policy of British government based on the report by 10-member Acworth Committee in 1924.

# The Committee had strongly urged the separation of railway finance from general finance instead of being included in Government of India’s general budget. Railway finance was then separated from general finance in September 1924 following the adoption of the Railways Separation Convention before the Indian Legislative Assembly.

#The ‘Convention’ laid down the amount of annual contribution to the General Exchequer that the railways should make.

Expectations from Railway budget 2018

# In what can be seen as a major demand in the present scenario, Odisha government has placed before the Centre a proposal of Rs 6,500 crore for consideration and inclusion in railway infrastructure development for the state in the 2018-19 budget. 

# The demand includes detailed proposals for ongoing projects, sanctioning of new lines, station modernisation, introduction of new trains, extension of existing trains, improved passenger amenities at stations, on board services, establishment of rail-based industries, multi modal logistic parks and others. 

# However, Piyush Goyal had said in November last year that the Railways is looking at innovative ways to finance its expenditure and does not need any funds from the Union Budget. He had also suggested that the Budget for 2018-19 can allocate more funds for public welfare to health and education out of the funds which will be saved from the Railways. Goyal, who after transforming the power sector took over the Railway portfolio in September, also stressed on an ‘efficiency’ hike rather than a fare hike.

# Passenger safety and basic amenities in the Railways sector is what Minister Piyush Goyal must be focusing on, considering the backlash his ministry has suffered due to rail accidents in the year 2017 with the latest Puri-Haridwar Utkal Express derailment in Uttar Pradesh last year that killed more than 20 and injured over 200 people.

Promoted Content

Write a comment