Merger of the Railway Budget with the General Budget: A Critical Study

Abstract

The merger of the separate Railway Budget with the General Budget marks a significant stride in the structural reforms within the Indian railways. This reform is strategically aimed at bringing railways investment to the forefront of holistic transportation policy and financing. By exempting dividend payment liability at the railways, the merger seeks to alleviate financial burdens and foster greater focus on infrastructural development. Chronic infrastructural constraints, exacerbated by under-investment and populist measures, have impeded the railways from effectively supporting India’s economic growth. The century-old practice of a separate Railway Budget has been identified as a contributing factor to these challenges. The integration of the Railway Budget into the General Budget has improved comprehension at the governmental and parliamentary levels. This consolidation has also facilitated enhanced budgetary support and capital expenditure allocation, thereby fostering an environment conducive to addressing infrastructural deficits and enhancing traffic performance with far-reaching implications for the nation’s economic development trajectory.