Notwithstanding the subsequent denials,it is clear there was a proposal (within the Finance Ministry) to unify the Railway Budget with the General Budget.
The separation goes back to Acworth Committees recommendations,submitted in 1921,but operational from 1924. Why did Acworth Committee want the separation? Because,in its absence,capital expenditure and expenditure on maintenance and renewals for Railways became arbitrary and ad hoc,and fluctuated on the basis of annual budgetary compulsions. The idea was to make Indian Railways autonomous,financially and otherwise.
Clearly,these objectives of the Acworth Committee have not been met,despite several committees,including the one headed by Rakesh Mohan (2002) that recommended corporatisation. Rakesh Mohan also heads the National Transport Development Policy Committee now. Reports have also appeared that major railway reforms,with an independent tariff regulator,commercial accounting and outsourcing of services are contemplated in 2011.
A review of the Indian Railways has been undertaken by the Planning Commission. For present purposes,the simple point is that Railways continue to obtain budgetary support. If thats the case,arguments for a separate Railway Budget no longer have any merit. This is also the broader agenda of structural reforms in Railways. The railways are untouched by reforms yet No decisions have been announced as on these recommendations.
That reference is to the recommendations of the 2002 Rakesh Mohan group and the quote is from a paper Montek Singh Ahluwalia wrote in 2002. If he were to write the paper today,the words wouldnt change. Presumably under pressure from some allied parties,the Finance Ministry has now denied there was an attempt to the unify Railway Budget with the General Budget.
Consequently,status quo continues.
