Budget 2025: Why did India stop presenting Railway budget?separately?

Finance Minister Nirmala Sitharaman will present the Union Budget 2025 in Parliament on Saturday, February 1. And as has been the custom since 2017, Sitharaman will be the only one delivering the budget speech.

That is because the Railway Budget, which was presented separately by the Railway Minister for more than twenty years ahead of the Union Budget, has now been merged with the latter.

CREDIT: BCCL

History of Railway Budget

Suresh Prabhu was the last Railway Minister to present a separate budget in February 2016, and in 2017, the then Finance Minister Arun Jaitley became the first to table a combined budget.

The practice of presenting a separate Railway Budget was started by the British due to the importance the rail network had in the Indian economy. The first Railway Budget was presented in 1924, and after independence in 1947, the custom continued.

John Matthai, who served as India's first Railway Minister and later Finance Minister, was the first Indian to present a Railway Budget in 1947.

Also read: Budget 2025: Everything that happens between Presidential address and tabling of budget

Why Railway Budget was scrapped

In November 2016, the Ministry of Railways announced that the central government would merge the Railway Budget with the Union Budget.

This decision was based on the recommendations of a committee headed by Bibek Debroy, a member of NITI Aayog, and a separate paper on 'Dispensing with the Railway Budget' by Debroy and Kishore Desai.

CREDIT: BCCL

They argued that the presentation of a unified Budget would help present a holistic picture of the financial position of the government.

Changes after merger of Railway and Union budgets

Based on the recommendations, it was decided that the Ministry of Railways would continue to function as a departmentally run commercial undertaking. A separate Statement of Budget Estimates and Demand for Grant would be created for Railways.

It was also decided to grant an exemption for the Railways from payment of dividends to General Revenues, and its Capital-at-charge would stand wiped off.

CREDIT: BCCL

While the Ministry of Finance would provide Gross Budgetary Support to the Ministry of Railways towards meeting part of its capital expenditure, the Railways was allowed to continue raising resources from the market through Extra-Budgetary Resources, as at present, to finance its capital expenditure.

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