Cabinet ends 92-yr-old rule, approves merger of Railways & Union Budget

NEW DELHI: The Modi government’s decision to discontinue the British-era practice of a separate Railway Budget , apart from being intended to encourage better fiscal management, is aimed at freeing the state-run transporter from the clutches of ruinous political populism With the railway budget often becoming a political gravy train , the state-run transporter was forced to divert resources even as unfinished projects piled up amid popular, but uneconomical announcements.The “political glamour” of rail ministry attracted the attention of regional political players who bargained and controlled the portfolio for more than 15 years of coalition government under United Front, NDA and UPA regimes. These leaders, barring some exceptions, treated the portfolio like a milch cow for distributing political patronage. This populism pushed back long pending reforms to plug the flaws in the national transporter’s structures and governance.The decision to do away with the rail budget was welcomed by BJD leader Bhartruhari Mahtab who heads the railway convention committee. “There is no need for a separate budget as there are other departments in the government that also have large budgets. The railway budget was a relic of colonial times with the general budget being presented in England,” he said.Barring Nitish Kumar, who was seen to be committed to financial and safety norms, other regional bigwigs like Ram Vilas Paswan, Lalu Prasad and Mamata Banerjee often focussed more on politics. TMC chief Mamata Banerjee, who left the rail portfolio after winning Bengal assembly polls, went on to sack her party nominee Dinesh Trivedi who increased passenger fares left untouched for decades.The Niti Aayog panel headed by Bibek Debroy which recommended scrapping of a separate budget had observed that the move would help to reduce railways visibility, which would actually be real reform as many critical areas would then possibly cease to be hostage to political compulsions.Populism resulted in more than 300 projects being announced in past budgets which require around Rs 3 lakh crore to complete. Keeping passenger fares low resulted in a subsidy burden of over Rs 30,000 crore annually and over charging on freight which saw the railways lose business to roads. Announcement of a large number of trains on uneconomical routes and stoppages by successive railway ministers further stressed the transporter.The cash-strapped railways was unable to raise the huge resources needed to make it viable through modernisation, increase in efficiency and reduction of wastage. Stressed finances have hit investment in vital operational areas.The proposed rail development authority to determine passenger and freight tariff and to ensure fair play and level playing field for private investments will further depoliticise the functioning of railways. Even at the beginning of UPA-2, the Planning Commission tried to push railways towards institutional reforms. Doing away with a separate budget, many feel, will accelerate the reform process.