The Union Cabinet on Wednesday approved the merger of the Railways Budget with the Union Budget. This puts an end to the separate Railways Budget that gets presented in the Parliament every year.
The Finance Ministry had made the proposal to merge the two budgets apart from advancing the date of Budget presentation.
Railways Minister Suresh Prabhu said, "The Railways ministry will work in harmony with finance ministry, and our efforts to leverage extra budgetary resources will continue. The merger would also facilitate an integrated and seamless approach towards transportation strategy in the country."
PTI quoted finance minister Arun Jaitley as saying all proposals of Railways will be part of the General Budget.
The Railways stands to gain after this decision as it will now not have to pay dividend to the central government, helping it save around Rs 10,000 crores.
Also, there will be no requirement of separate Appropriation Bills as well as Vote on Account, as is the current practice.
The Railways will continue to maintain its distinct entity status as a departmentally run commercial undertaking and will retain its functional autonomy with delegation of financial power rules to continue.
Like for other departments, the ministry of finance will provide gross budgetary support to the Railways for incurring its capital expenditure.
(With inputs from PTI)