Cabinet approval for advancing budget date, merger of rail budget likely today

A meeting of the union cabinet today is expected to take a decision on advancing the date for budget presentation to 1 February as also the merger of Railway Budget with the General Budget.

Railway minister Suresh Prabhu, who has already given his consent on the budget merger proposal, will attend the cabinet meeting along with chairman of Railway Board AK Mital.

The meeting of the union cabinet chaired by Prime Minister Narendra Modi, will also consider the proposal for doing away with the distinction between Plan and non-Plan expenditure.

It is proposed to advance the entire budget-making exercise by 3-4 weeks so as to complete the legislative part of financial business before 1 April, the start of the new financial year.

Accordingly, the government is likely to convene the budget session of Parliament before 25 January 2017 and present the pre-Budget Economic Survey a day or two before the finance minister presents the budget on 1 February.

A joint committee set up to finalise the modalities for the merger of Rail Budget with the General Budget has, meanwhile, recommended various changes in the proposals. However, Railways will continue to pay dividend and central budgetary support will continue.

However, the cabinet will take a call on whether to continue with providing about Rs5,000 crore as subsidy to railways for construction of strategic railway lines.

In the 2015-16 fiscal, Railways paid a dividend of Rs9,731 crore and received a subsidy of Rs4,301 crore, with the government making a net gain of Rs5,430 crore.

The Union  Budget will also have a separate annexure with details of railways' expenditure, according to the recommendations of the joint committee comprising senior officials from Railways and finance ministry.

For example, the purchase of 300 aluminium coaches from the market will reflect on the expenditure on account of acquiring new rolling stock for the next fiscal.

The report is believed to have suggested ways for dealing with the railways' huge financial burden, once the Railway Budget is merged with Union Budget.