Public Administration Answer Writing Practice 2018 - Week 8 - Question 6
90 Days Public Administration Answer Writing Practice Question 2 for 04-Jan-2019
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04-Jan-2019 - Question 2
What merits do you foresee in the proposd merger of the Railway Budget with the General Budget? (2016)
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The rail Budget was separated from the main Budget on recommendation William Acworth in 1920-21. Since 1924, the Rail Budget has had a separate existence from the general Budget. The Rail Budget was merged with the Union Budget from the budget year 2017-18.
The salient features of merger and the benefits likely to accrue there from are broadly given below:-
- Ministry of Railways will continue to function as a departmentally run commercial undertaking.
- Railways will get an exemption from payment of dividend to General Revenues and its Capital-at-charge would stand wiped off.
- Ministry of Finance will provide Gross Budgetary Support to Ministry of Railways towards meeting part of its capital expenditure. Railways may continue to raise resources from the market through Extra-Budgetary Resources as at present to finance its capital expenditure.
- Depoliticized the decision on fairs of both passengers and fright.
- The merger of Rail Budget with Union Budget would facilitate multimodal transport planning between highways, railways and inland waterways;
- It will allow Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.
- Railway budget was a political tool for populism and patronage. Now the decision based on rationality and impartiality.
The presentation of a unified budget will help present a holistic picture of the financial position of the Government. Reforming the railways has been extremely difficult. Entrenched vested interests, the political bargaining clout of lakhs of workers and vote-bank politics have made it difficult to rescue the almost bankrupt Indian Railways. Ending rail budget should only be a beginning of some largely delayed restructuring process in Railway. The scrapping of a railway budget may be a good starting point but a lot more needs to be done to clean the accounts of railways.