rail budget suresh prabhu scrapped modi jaitley arun narendra 92 year old tradition british raj merge general budget dividend
The Indian government on Wednesday scrapped a 92-year-old practice to present the railway budget separately. It will now be merged with the general budget. In Picture: India's Railway Minister Suresh Prabhu (C) gestures upon his arrival at the parliament to present the railway budget in New Delhi, India, February 25, 2016.Reuters file

The Narendra Modi government took a historic decision on Wednesday to scrap the railway budget and merge it with the general budget. A similar decision was taken during the Vajpayee government in 1999 when the timing of the budget presentation was changed to 11 a.m. from 5 p.m.

Besides, the Union Cabinet also decided to advance the presentation of the general budget by a month.

The decision ends the 92-year-old practice of having a separate budget for the Indian Railways, in addition to freeing the department from paying dividend to the government as decided by the Railway Convention Committee.

The move to dispense with the rail budget was a foregone conclusion after railway minister Suresh Prabhu wrote to the finance ministry seeking to merge it with the general (union) budget. 

"I had written to Finance Minister Arun Jaitley for merger of the Rail Budget with the General Budget. This will be in the Railway's interest and also in the nation's interest. We are working out the modalities," Prabhu was quoted as saying by PTI in August this year.

The presentation of the budget in the beginning of February would allow the government to ensure completion of procedural exercises to ensure that all levies are made applicable from April 1, the beginning of the financial year. Currently, many of the taxes are levied from June 1 since it takes time for the Parliament to pass the enabling legislations and approve the budget.