Getting railways on Track.
The reasons stated for the merger of railway budget with general budget are
- Indian railway Need not pay annual dividend on the the budgetary support given by government of India. It saves railways 10,000cr rupees annually.
- Separate railway budget is misused by the politicians as a populist platform to enhance their own image. Reluctance to increase the passenger prices skewed the tariff prices and railways is losing freight to road transport. Now, economic rational decisions will prevail.
- No other ministry has a separate budget and the practice exists in no other country today.
- Railways share in the general budget has progressively reduced over the years, making separate budget an anarchism. In 1924, railway expenditure is higher than all other expenditure of the government of India put to gather. Today it forms only 6% of the total budget.
- there is fall in revenues, increased expenditure and market borrowings for developing the railways. It needs higher budget allocations.
On the other side
- Railways is the only department solely concerned with commercial operations.
- It is the department that earns besides spending.
- Railway budget provides an opportunity for the parliament to scrutinize in detail the functioning of the department.
- Gross earnings of railways stand at 1.68 lakh Crore not comparable to any dept.
- It has the highest staff strength and it fully meets the pension liabilities of its employees.
1n 1924, Ac worth committee first recommended for the separation of Railway budget from the general budget. It was seen as a commercial activity funded by British government and dividends need to be paid to the share holders. The designation of railways as a commercial activity still stays.
Criticism
- The decision would end the autonomy of the largest public carrier in the country.
- Merger can be seen as a move towards privatization.