Lok Sabha Question No. 204 (UNSTARRED), answered on 2016-11-16
Subject: Merger of Rail Budget with Union Budget
Ministry: RAILWAYS
Asked by: RAJEEV SHANKARRAO SATAV, KONDA VISHWESHWAR REDDY, DHANANJAY BHIMRAO MAHADIK, SUPRIYA SADANAND SULE, SAUGATA ROY

## GOVERNMENT OF INDIA MINISTRY OF RAILWAYS

## LOK SABHA

## UNSTARRED QUESTION NO.204 TO BE ANSWERED ON 16.11.2016

## MERGER OF RAIL BUDGET WITH UNION BUDGET

204.  SHRI SATAV RAJEEV:

SHRI KONDA VISHWESHWAR REDDY:

SHRI DHANANJAY MAHADIK:

SHRIMATI SUPRIYA SULE:

PROF. SAUGATA ROY:

SHRIMATI KOTHAPALLI GEETHA:

SHRI SHAILESH KUMAR:

Will the Minister of RAILWAYS be pleased to state :

- (a) whether  the  Government  has  decided  to  merge    rail  budget with the union budget;
- (b) if  so,  the  details  thereof  and  the  reasons  therefor along with the benefits likely to accrue as a result thereof;
- (c)     the proportion of the budget allocated to Railways during the last five years and the quantum of dividends and interests paid by the railway to the Government; and
- (d) the estimated savings, if any, to the Railways from the merger?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF RAILWAYS

(SHRI RAJEN GOHAIN)

- (a) to (d)  : A Statement is laid on the Table of the House.

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STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d) OF UNSTARRED QUESTION NO. 204 BY SHRI SATAV RAJEEV, SHRI KONDA VISHWESHWAR REDDY, SHRI DHANANJAY MAHADIK, SHRIMATI SUPRIYA SULE, PROF. SAUGATA ROY, SHRIMATI KOTHAPALLI GEETHA AND  SHRI  SHAILESH  KUMAR  TO  BE  ANSWERED  IN  LOK  SABHA  ON 16.11.2016 REGARDING MERGER  OF RAIL BUDGET  WITH UNION BUDGET

- (a) & (b) : Yes, the Government has decided to merge Rail Budget with the  Union  Budget  from  budget  year  2017-18.  The  merger  of  Railway Budget  with  General  Budget  is  based  on  the  recommendations  of  the Committee  headed  by  Shri  Bibek  Debroy,  Member,  NITI  Aayog  and  a separate  paper  on  'Dispensing  with  the  Railway  Budget'  by  Shri  Bibek Debroy along with Shri Kishore Desai. A Committee with representatives from Ministry of Finance and Ministry of Railways examined the issues involved and worked out the procedural details.

The  salient  features  of  merger and the benefits likely to accrue therefrom are broadly given below:

- i. Ministry of Railways will continue to function as a departmentally run commercial undertaking;
2. A separate Statement of Budget Estimates and Demand for Grant
- ii. will be created for Railways;
- iii. A  single  Appropriation  Bill,  including  the  estimates  of  Railways, will be prepared and presented by Ministry of Finance to Parliament  and  all  legislative  work  connected  therewith  will  be handled by Ministry of Finance;
- iv. Railways will get exemption from payment of dividend to General Revenues and its Capital-at-charge would stand wiped off;
- v. Ministry of  Finance  will  provide  Gross  Budgetary  Support  to Ministry of Railways towards meeting part of its capital expenditure;
- vi. Railways  may  continue  to  raise  resources  from  market  through Extra-Budgetary  Resources  as  at  present  to  finance  its  capital expenditure;
- vii. The  presentation  of  a  unified  budget  will  help  present  a holistic picture of the financial position of the Government;
9. Merger  of  Rail  Budget  with  Union  Budget  would  facilitate multimodal  transport  planning  between  highways,  railways
- viii. and inland waterways; and
- ix. It will allow Ministry of Finance greater elbow-room at the time of mid-year review for better allocation of resources, etc.

- (c)  :  The  budgetary  support  allocated  to  Railways  by  the  General Exchequer and dividend paid by the Railways to the Government is given below:

( ` in crore)

| Year            |   Budgetary Support |   Dividend and interest paid |
|-----------------|---------------------|------------------------------|
| 2011-12         |             20013.4 |                      5784.28 |
| 2012-13         |             24131.9 |                      5466.5  |
| 2013-14         |             27072.4 |                      8008.67 |
| 2014-15         |             30121.2 |                      9173.55 |
| 2015-16 (Prov.) |             35007.9 |                      8722.51 |

- (d) : The Capital at charge of the Railways on which annual dividend is paid by the Railways will be wiped off. Consequently, there will be no dividend liability for Railways from 2017-18 while Ministy of Railways  continue  to  get  Gross  Budgetary  support  for  capital expenditure. This will save Railways from the liability of payment of approximately ` 10,000 crore as annual dividend to the Government of India which after adjusting the subsidy in payment of  dividend  would give a net benefit of about ` 5000  core  to  the Railways.

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