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Breaking away from a practice of over 90 years of presenting a separate rail budget (since 1924 based o­n recommendations of Acworth Committee of 1921), Finance Minister presented the budget outlay for Indian Railways along with the General Budget in the Parliament today. The Constitution has no mandatory provision for separate Budget for Railways, but the practice was started in the 1920s as at that time more than 50% of the total revenue of the Government of India was contributed by the Railways. Since then, Railway’s share of contribution to central government revenue had steadily declined and in 2015-16 o­nly 11.5% of the Government of India’s revenue came from Railways.

The merger of Railway Budget with the General Budget would enable merit-based decisions related to investments, operations and pricing while balancing the social and economic priorities and focussing energies o­n delivery and good governance. Railways will retain its functional autonomy and can raise resources through Extra Budgetary Resources for financing its capital expenditure. The merger would also facilitate planning for multi-modal transport between highways, railways and inland waterways.

As a result of the merger, Railways will not have to pay dividend o­n capital at charge contribution from general revenues. However, Railways will not get subsidy o­n dividend payment and operational losses o­n strategic lines. So, the net savings to Railways will be about Rs. 5400 crore based o­n 2016-17 Budget Estimates due to non-payment of dividend.

The major highlights of the Railway portion of the General Budget are : -

For 2017-18, the Plan size has been pegged by the Railways at Rs. 1, 31,000 crore.

To be supported by a Gross Budgetary Support of Rs. 55,000 crore, which is higher by 19 per cent as compared to 2016-17.

The balance funds to be arranged by Railways through internal and extra-budgetary resources including funds from LIC.

Budget provision for NE states

BG connectivity to all the capitals of the North-Eastern states is targeted for achievement by 2020.

The entire rail network of North-East states will be o­n BG by end of 2016-17.


To liquidate the backlog of renewal of assets and to ensure safer running of trains, a Rashtriya Rail Sanraksha Kosh has been created with a corpus of Rs. 1 lakh crore, for which the Central Government will provide an annual support of Rs. 15,000 crore (sourced from GBS/CRF) for a period of five years. The balance resources for the Fund will be arranged by Railways.

Working towards the objective of elimination of unmanned level crossings o­n the BG network by 2020, three zonal Railways (West-Central, Eastern and Central) have completely eliminated them o­n their network.

Capacity expansion

Decongestion of High Density Network; In 2016-17, it is expected that IR will commission about 2800 kms of lines for passenger services and in 2017-18, the target will be 3,500 kms. 

Electrification. About 2,000 kms of electrification will be completed in 2016-17 and new electrification projects of 4,000 km are targeted for completion in Budget 2017-18.

Entire metre gauge line will be converted to broad gauge by 2020. All the remaining sections needed to be converted to Broad Gauge are being sanctioned.

In the next 3 years, the throughput is proposed to be enhanced by 10% by following an integrated approach for modernization and upgradation of identified corridors.

Passenger Amenities

500 stations to be made differently-abled passenger friendly by providing lifts and escalators at these stations.

IR to introduce a concept of ‘Coach Mitra’ which will be a single window interface to register all coach related requirements of passengers travelling in reserved coaches, such as, cleaning, disinfection, linen, train lighting,  air conditioning and watering of coaches.

Viability and Sustainability of Railways

In order to provide financial reports compatible with generally accepted accounting principles and provide activity-based costing to aid managerial decision-making, a Mission “Beyond Book-keeping” for accounting reforms had been launched. It is progressing satisfactorily and the accrual based financial statements are targeted for a rollout by March 2019.

A Rail Development Authority is also proposed in the current year for recommending tariffs and service level benchmarks. The regulatory authority is expected to restore the balance between passenger and freight tariffs and also provide a level playing field to other stakeholders. Key performance indicators will be a focus area to improve asset utilization o­n IR.

Indian Railways to feed about 7000 stations with solar power in the next few years.

By 2019, all coaches of IR will be fitted with bio-toilets. In this year, 30,000 bio-toilets are being fitted.

(Pranav Jyoti Sharma)

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