Merger of Railway Budget with General Budget

 Merger of Railway Budget with General Budget 

 

Salient Points

·                     With effect from 2017-18 year.

·                     Single Demand for Indian Railways  -  83- Ministry of Indian Railways  (Subsumed all existing 16 Demands Numbering 01 to 16)

·                     Initially Demand No 80 is allotted to Indian Railways. Subsequently it is changed to 81 and again to 82.  Finally for 2020-21 year, the Demand No is 83 (Due to additions and deletions of Ministries/Dept in Union Government)

·                     Erstwhile Demands 03 to 14 (Total 12) are renamed as SMH - Sub Major Head 01 to 12 respectively under Major Head 3002 - Indian Railways Working Expenses - Commercial Lines. 

·                     But Classification /Allocation of Expenditure still align with the erstwhile Demands Nos 01 to 06 as per Indian Railways Finance Code Volume II

·                     Demand No. 83 is subdivided into Revenue Section and Capital section.

·                     Revenue Section  - Major Heads 3001, 3002

·                     Capital Section - Major Head 5002

·                     Capital at Charge since inception stands extinguished.  Hence No Dividend needs be paid on Capital at Charge.

·                     At the same time, no subsidies are available to Indian Railways from Union Government

·                     Interest on Capital is however worked out just like Dividends, but no amount need be paid.

·                     August Review Estimates Budget Review is dispensed.  Two Budget Reviews only existed as of now. 1.  RE/BE - Revised Estimates of Current Year/Budget Estimates of Next Year and 2. FME - Final Modification Estimates 

·                     RE/BE is now due in September in lieu of November.

·                     Works Budget  - Proposals to be sent for Works in Progress only

·                     Benefits and Pitfalls of Joint Family over Nuclear Family will apply. 

 

Pros

1.           Only One Appropriation Bill (instead of Two Appropriation Bills) 

2.           Both Time and Money for preparation of Railway Budget is saved

3.           Less Political Pressure on Ministry of Railways

4.           No Populism Budget

5.           Revenue deficit (of Indian Railways) will be passed on to Finance Ministry

6.           More flexible for Railway Board to re appropriate between Sub Major Heads (erstwhile Demands)

7.           Annexure J  - Big Relief to Indian Railways - Statement of Misclassification is now limited to Misclassification from Revenue to Capital or vice versa and Voted to charged or vice versa)  - Included in Appropriation Accounts and goes to Parliament through PAC

8.           Misclassification from One SMH to another SMH on Revenue segment only figured under Statement of Other Mistakes (Not Statement of Misclassification)  - Not appeared in Appropriation Accounts.  To be settled at Zonal Railway level only. 

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