Redundant budget

Redundant budget

Finance minister Pranab Mukherjee’s proposal to put an end to the practice of presentation of a separate budget for the Railways and instead have a consolidated Union budget is a step in the right direction. It is only in India that the Railway ministry presents a budget of its own before the general budget is presented. This is a vestige of a British tradition and was started under the Separation Convention in 1924.

There is actually no constitutional sanction for it. The practice may have been necessary or useful in pre-Independence days when the Railways accounted for almost 70 per cent of the government expenditure. But it has little rationale now when it is just one department of the government and there are many others which have much bigger allocations. The Plan support for the Railways is only Rs 16,000 crore while that for defence is 1.75 lakh crore.   And there is no separate defence budget presented to parliament.

The separate treatment given to the Railways has done much to politicise its working. The railway minister can easily dispense with favours and patronage and this has made the ministry a much sought after one. This has badly affected the department.  Populism dictates many of the decisions and the Railways, one of the most important infrastructure departments, have not made much progress in the last many decades.

The  present minister,   Mamata Banerjee, managed  to make the cabinet agree to the highest ever bonus of  77 days wages, amounting to over Rs 1,000 crore, for the 14 lakh employees of the department and has announced a number of populist projects in view of the approaching Assembly elections in West. The rail projects announced by successive ministers call for an investment of about Rs 1 lakh crore, but the ministry has a budgetary support of only Rs 15,000 crore.

This is a totally untenable situation.  Many projects do not take off and others do not get completed.  The launch of unviable projects and attempts to implement them, on personal and political considerations, also lead to wastage of resources. Projects which are genuinely needed are ignored. The Railways’ finances and the economy as a whole suffer from these problems.

India has the world’s fourth largest rail network and the railways are the biggest employer in the country. The separate status given to it has only set it back and prevented it from playing its true rule in public and economic life. Earlier Mukherjee’s proposal is implemented the better.