No separate Railway Budget
The Union Cabinet has decided to bring the curtains down on the 92-year-old tradition of presenting a separate Rail Budget. It has been decided to merge the Rail Budget and the General Budget.
Consequently, Railway Minister Suresh Prabhu will not present it for the year 2017-18. Instead, Finance Minister Arun Jaitley will present a “unified” budget.
Reason for this reform
The decision, taken on the recommendation of a NITI Aayog, reflects the decrease over time in the relative size of the Rail Budget compared to some of the other components in the General Budget, such as defence and roads & highways, reducing it to a mere “ritual.
Aim of this reform
1. The reform was intended to “deglamorise” the Railways portfolio and discourage the leveraging of the Rail Budget for vote banks.
2. Decisions like that are commercially crucial but politically challenging, especially fare hikes would now become routine ones taken any time during the course of a year without as much public glare.
Railway Convention Committee (RCC) scrapped
As the government decides to merge the Railway Budget and the General Budget, Union Cabinet scrapped Railway Convention Committee (RCC) which determines the rate of dividend to be paid to the Finance Ministry.
About Railway Convention Committee
The Committee consisted of 18 members — 12 members from Lok Sabha and six members from Rajya Sabha. Both the Ministers of Railways and Finance are nominated members of the Committee. It was constituted in 1949 with the primary role of determining the rate of dividend, modalities of its payment and exemptions. It took on a wider role of examining various subjects related to working of the Railways and its finances since 1971.