The Union Cabinet has approved the proposals of ministry of finance reforms relating to merger of railway budget with the general budget, advancement of the date of Budget presentation from the last day of February to the 1st of February and merger of plan and the non-Plan classification in the budget and accounts.
All these changes will be put into effect simultaneously from the Budget 2017-18.
Following this merger of railway budget with the general budget, railways are likely to save Rs.9,700 crore annual dividend that is being paid to Government of India as a liability payment.
This decision will put an end to separate railway budget which was started in the year 1924.
The cabinet also approved the proposal of advancement Budget presentation date from the last day of February to a suitable date. The exact date of presentation of Budget for 2017-18 would be decided keeping in view the date of assembly elections to be held in States.
The third proposal approved by the Cabinet relates to the merger of Plan and Non Plan classification in budget and accounts from 2017-18, with continuance of earmarking of funds for scheduled castes sub-plan/tribal sub-plan. Similarly, the allocations for North Eastern States will also continue.
The merger of plan and non-plan in the budget is expected to provide appropriate budgetary framework having focus on the revenue, and capital expenditure.