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Govt merges Rail Budget with General Budget; Suresh Prabhu calls it historic step
In a major step, the Union Cabinet has decided to end a 92-year-old tradition of separate rail budget and decided to merge it with the general budget from the next financial year on Wednesday. The move will put an end to the practice that had started in 1924.

"Rail budget and general budget will be amalgamated from now, there will only be one budget," said finance minister Arun Jaitley after the Cabinet meeting. "However, the functional autonomy of railways will be maintained," added Jaitley.

The government also wants to advance the Budget process along with the date of presentation next year. Jaitley said, the dates for next year's budget session of the Parliament will be finalised considering the calendar for assembly elections in Uttar Pradesh, Punjab and Uttarakhand due in the year 2017.

Finance minister Jaitley had proposed presenting the next year's budget on Feb 1. The Railway Budget used to be presented two days before the Union Budget. "All proposals regarding the Railway budget will be part of general budget, which will have a separate discussion on railway expenditure," said the finance minister.

The new practice will give relief to the Railways, as its revenue deficit and capital expenditure will get transferred to the finance ministry now. The move to end this decades-old practice was recommended by a committee led by Niti Aayog member Bibek Debroy.

On restructuring of the Ministry of Railways, Debroy had suggested that the government should put an end to the British-era legacy of presenting a separate Railway Budget and merge it with the General Budget.

"A historic step," tweeted Railway Minister Suresh Prabhu and added that "This will help raise capital expenditure in Railways which will enhance connectivity in the country and boost economic growth. Functional autonomy, distinct identity of Railways will remain as it is. Our efforts to leverage extra budgetary resources will continue."

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