Why a separate Rail Budget?
Certainly not for entertainment by Laloo !
My friend in Chennai, Natarajan , Advocate sent me this query:-
I rather wonder, as to why the Budget of the Railway Ministry shall be given such an importance. The Budget of the Finance Ministry, which contains various taxation proposals and also allocations for all activities of the Government, is very important and the whole nation is glued to Mr. FM on the last day of February 2008 and this is understandable. But, why the Budget of the Railway Ministry is making sensational news? Is every citizen really bothered to know as to what are the few new trains announced by the Railway Minister or the few kilometres of the routes which are going to be electrified? Does the marginal reduction of train fare have such a news value? When compared, the impact of hike of the price of petrol by a Re. would have more news value than a marginal reduction in train fare.
Have we ever heard of the Budgets of any other Ministries being presented in the Parliament and getting such media coverage? For example, Petroleum Ministry, Civil Aviation Ministry? Do they have any budgets at all?
What is the history behind making the railway budget so special? Can anyone enlighten me and also similar ignorant netizens?
DDT's research revealed interesting facts.
The CAG 's Report No.6 of 2006 (Railways) stated:
Railway finances were separated from General finances through a Separation Convention in 1924 to secure stability for civil estimates by providing an assured contribution from railway revenues and also to introduce flexibility in the administration of railway finances. In 1949 the Separation Convention was reviewed and another convention resolution was adopted with effect from 1 April 1950, which recommended presentation of a separate railway budget every year prior to presentation of the general budget. As contemplated in the convention of 1949, a Railway Convention Committee ( RCC ) was constituted in 1954 to review the rate of dividend payable by the Indian Railways to the general revenues and other ancillary matters
Natarajan is not alone in his views. P. Upendra , a former railway Minister, speaking in the Lok Sabha on March 13, 1999 , said,
When the Railway finances were separated in 1920, the purpose was different because they wanted to give to the Railways freedom to expand, freedom to plan for themselves , unfettered by the impact of the general finances. But we find today that the purpose of this Budget is completely lost. There is the same old rigmarole every year and the same old tamasha of the Minister giving finishing touches to the Budget with the Minister of State sitting by his side and the Members of the Railway Board standing behind. Actually, his own colleague in the Samata Party, Shri George Fernandes , when he was the Railway Minister, said that there was no need for a separate Railway Budget and there is no secrecy in the Railway Budget. So, the Minister need not carry a briefcase with the Budget. There is a lot of difference between the General Budget and the Railway Budget. Even if the Minister increases the fares and freight charges and even if somebody buys a ticket two months ahead he has to pay the difference when the new fares come into operation. Therefore, there is no secrecy at all. If the Minister wants to introduce a new train or if he wants to order a survey, why should he wait for the Railway Budget? He can do these things throughout the year. So, I think, the time has come to find out whether it is worthwhile to have a separate Railway Budget, because today, the Ministry of Defence has got almost the same budget, the Ministry of Telecommunications is reaching the same level and the Ministry of Power is also having almost the same budget. Therefore, with about Rs.35 ,000 crore income and revenue, I do not think the Railways need a separate budget. In fact, a Status Paper each year, probably, will serve the purpose by indicating what the Railways have done.
Six years later, on March 14, 2005 , Pramod Mahajan , participating in the discussion on the Rail Budget, said,
When the total revenue of the country was Rs. 180 crores during 1920-21, railways revenue was Rs. 82 crores . Today the total budget revenue of the country has touched to more than Rs. 5 lac crores and railway budget has reached to Rs. 50 thousand crores approximately. Some public sector and private sector companies in the country today also have a budget of more amount than the budget of railway. Therefore, there is no justification for a separate railway budget. Only two main items i.e. passengers fare and goods freight and changes in the timings and frequency of the trains are generally repeated in the railway budget. Therefore, this budget can also become a part of the General Budget.
Pakistan also like India had a separate Railway budget, but now has a common budget. But now the TV channels starved of news, hungry for stories will not allow the entertainment to be curtailed and the Laloos of the world should have their hour of glory.