Public Administration Answer Writing Practice 2018 - Week 8 - Question 6

90 Days Public Administration Answer Writing Practice Question 2 for 04-Jan-2019

Instructions for Writing Answer

1. Write your answers in the comment section.

2. Experts will provide their feedback in reply.

3. Model Answers will be uploaded on this page the next day.

4. Rectify your mistakes and progress further.

5. All the Best.

04-Jan-2019 - Question 2

What merits do you foresee in the proposd merger of the Railway Budget with the General Budget? (2016)

For Question 1- Click Here

Model Answer

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:-

  1. Ministry of Railways will continue to function as a departmentally run commercial undertaking.
  2. Railways will get an exemption from payment of dividend to General Revenues and its Capital-at-charge would stand wiped off.
  3. 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.
  4. Depoliticized the decision on fairs of both passengers and fright.
  5. The merger of Rail Budget with Union Budget would facilitate multimodal transport planning between highways, railways and inland waterways;
  6. It will allow Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.
  7. 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.

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