Debroy makes case for scrapping separate railway budget

The British-era legacy of having a separate railway budget needs to be scrapped, NITI Aayog member Bibek Debroy said on June 22 reiterating the suggestion made by a panel headed by him last year.

Debroy, however, dismissed reports that a new committee of NITI Aayog has made a similar recommendation.

"I don't know about any such committee. Whatever we had said in our recommendation is public knowledge," Debroy said.

He, however, is of the opinion that there should not be separate rail budget as recommended by a high-level committee headed by him, which submitted its report last year.

The committee had said that the separate railway budget should be phased out progressively and merged with the General Budget.

"There is no need for separate railway budget. We have said it very categorically in the committee report. There are five reasons why railways budget is not necessary," Debroy said.

Elaborating it, he said, "The origin of this goes back to the Acworth Committee report in 1924. The report was triggered by the question whether East Indian Railway Company should be granted an extension of its lease... only recommendation of separate railway budget was implemented." He further said, "All those countries that Acworth Committee mentioned no longer have separate railway budget. The second reason is that there is no constitutional or legal requirement for separate railway budget. Union Budget is a constitutional requirement.

"If one is expecting the railways to function according to commercial principles then decisions should be left to railway board. The decision cannot and should not be left to Parliament." The economist explained, "The railway budget is an avenue for populism with MPs demanding new trains and stops for existing ones. These decisions should be taken by railway board on a commercial basis. A lot of resources are wasted in the process of preparing it. A very complicated relationship between Finance Ministry and Railways has evolved. We should simplify it," he added.