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A Sneak Peak Into The History Of India’s Railway Budget: Separation and Merger

Indian Railways Budget

Union Budget 2023-24 will be presented to the country where the entire emphasis of the central government will be the country’s way forward influencing infrastructure development, especially projects related to Indian Railways and getting high-speed trains becoming operational as soon as possible to boost the country’s transportability.

 India’s Budget 2023

Image Courtesy: Vartahub

The central government is working on increasing the railway budget by 20-25 per cent to strengthen the infrastructure of the entire railway system. According to sources in the Railways Ministry, there is a possibility of an allocation of nearly Rs 1.8 lakh crore for this sector in 2023-24, which was Rs 1.4 lakh crore in 2022-23.

According to Railway Ministry officials, in this year’s budget, more allocation will be made for laying new tracks, increasing the number of semi-high-speed Vande Bharat trains, introducing hydrogen-powered trains on the basis of sustainable aspirations, as well as the awaited Ahmedabad-Mumbai bullet train project.

Let’s Look Back At India’s Railway Budget…

Railway Budget’s Separate Identity

Is Merging Railway and Union Budget an idea whose time has come? - PGurus

Image Courtesy: Pgurus

The practice of a separate Railway Budget started in 1924 during the British rule in India. During those days, Railways were the largest industrial asset of the country and occupied a significant portion of the budget (75 to 85 %). Since the Railways then constituted such a large portion of the General Budget, it was recommended by British officials to separate the Railways from the general budget solely for better policy formulation and implementation. Now the Railways constitute 4% of the country’s total Union Budget allocations.

Political Influence

The politicians since independence have cashed in on the Railways for personal gains. A separate railway budget allows them to announce trains, an extension of routes etc. for a particular region/state and then take credit for the same. Therefore, even though the separation of Railways from the General Budget may have been a necessary governance step at the time of introduction, it is now a tool for personal motives. Lately, due to corporate involvement, the railways witnessed a significant boost.

Merged With The Union Budget In 2017

Arun Jaitley presents Budget 2017-18 in Lok Sabha

Image Courtesy: Dailyexcelsior

The Union Cabinet in 2016 decided to merge the Railway Budget with the General Budget, thus ending the 92-year-old tradition of having a separate Railway Budget. Arun Jaitley brought this up in 2016 at the Rajya Sabha and a special committee was constituted to plan the merger of both Budgets. As per the Niti Aayog recommendations, over the years, the Railway Budget had shrunk significantly. India was the only country with a separate Railway Budget. In 2017, Arun Jaitley presented the first combined Union Budget, and the practice hails even today.

Was Railway Budget A Burden?

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Railways are said to receive a major boost in Union Budget 2023-24 where various important and impactful announcements will be made by the Central Government in the upcoming budget.

Catch the Union Budget here:-



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