The Union Finance Ministry has started the process of examining the proposal from the Railway Ministry to merge the Rail Budget with the General Budget, 92 years after the separation took place. The Rail Budget has had a separate existence from the General budget since 1924 when the British spun it off for a better focus on India’s most important infrastructure network. The Railways then accounted for 70 per cent of the total budget. The Rail Budget now is only 15 per cent, on an average, of the country’s budget. The Indian Railways suffer from a huge revenue deficit, the burden of which after the merger will be transferred to the Ministry of Finance. The already stressed Railways is facing an additional burden this year of Rs 30,000 crore on account of the 7th Pay Commission recommendations. The letter from Prabhu came after a committee headed by NITI Aayog member, Bibek Debroy suggested the merger as part of restructuring of the Railways. If the merger happens, the Railways will also get rid of the annual dividend it currently has to pay for Gross Budgetary Support (GBS) from the government. If the Finance Ministry agrees to the proposal, there could be a unified Union Budget for 2017-18 after 92 years.
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