Railway Budget Separation: Why It Was Merged with Union Budget in 2017

This is a milestone in the Indian fiscal policy. In 2017, the railway budget merged with the trade union budget because it would allow better financial management and strategic consistency with railway operations with national economic goals. It is based on the comprehensive suggestion of Niti Aayog member Bibek Debroy, which was first implemented in the 2017-18 budget year.

Historical background

Historically, railway budgets and union budgets appeared separately. The first railway budget was proposed in 1924 that separation allows concentration of attention to the unique financial dynamics of the Indian railway. Over time, this approach becomes more and more outdated and inefficient, and requires reform.

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Critical suggestions and functions of mergers

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The merger passed the detailed inspection of the problems involved in detailed inspection, and finally the significant characteristics of several designed to simplify the operation:

• Department of commercial enterprises: The Ministry of Railway will continue to operate as a business entity operating by the department to ensure that it retain its autonomy of operation, while maintaining the same extensive government financial strategy.

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• Comprehensive introduction of the budget statement: For the railway, the estimated estimation of the budget demand and the independent statement of the donation claims are jointly proposed through a funding bill of the Ministry of Finance. With the purpose of this integration is to show the overall view of Indian financial conditions.
• Agreement from dividend payment: One of the most important changes is that the railway will be exempted from paying dividends from general income. It is expected that this will exempt the railway from about 1000 billion rupees of annual responsibility, so that more funds will be used for capital expenditure.
• General budget support: The Ministry of Finance will provide general budget support to the Ministry of Railway to fund their capital expenditure. It is important to support infrastructure investment and improve service quality.
• Market resource mobilization: After the merger, the railway can still mobilize EBR resources freely and will not be flexible in funding their capital plans.
• Simplified multi -mode transportation plans: Budget mergers will help different departments such as cross -highways and inland waterway transportation to make more simplified multi -transport plans; therefore, the overall method is integrated into the transportation strategy.
• Improve fiscal efficiency: The merger will alleviate better resource redistribution in the medium -term review, while the Ministry of Finance has a full attitude to make decisions that need to be resolved in budget support, considering contemporary requirements and results based on results.

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Financial effect

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This also has considerable financial influence. For example, the Indian railway has been responsible for paying huge dividends in its capital. In some few years before the merger, these are as high as 90 billion rupees. After eliminating this responsibility, the railway can save 500 billion Rsitari each year and adjust the dividend subsidies.

The merger of railway budget and trade union budget is a strategic transformation of the comprehensive method of fiscal management in India. The consistency of eliminating ancient practice and railway operations and national priorities will not only improve operating efficiency, but also improve the planning and resource allocation of the majority of transportation networks in India. Now, this merger is expected to be used in handling to support the sustainable growth of Indian national economics while improving the public transport service methods on its entire territory.

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Source: https://dinhtienhoang.edu.vn
Category: Optical Illusion