In what would be a huge benefit for the cash-strapped Railways, the scrapping of separate Rail Budget would have it save Rs 10,000 crore per year as it would no longer need to pay dividend.
A joint committee, set up to finalize the modalities for the merger of Rail Budget with the General Budget, has submitted its report to the finance ministry recommending various changes, including waiving off of payment of dividend by railways though the practice of getting gross budgetary support (GBS) from the exchequer, will continue.
The Railways pays about Rs 10,000 crore as dividend a year after getting about Rs 40,000 crore.
The General Budget, to be presented by the finance minister, will also have a separate annexure with details of plan and non-plan expenditures to be incurred by the national transporter, according to the recommendations of the joint committee comprising senior officials from railways and finance ministry.
The recommendations will be placed before the Cabinet which has to decide on the subject, the sources said, adding till then, nothing is final.
The report on merger of Rail Budget and General Budget, which was to be submitted by August 31, was delayed due to some "unavoidable reasons" and it was finally submitted to the finance ministry on September 8, sources in the railways said.
Though the sources declined to divulge the committee's recommendations on the ground that the "report is now in the finance ministry's domain", it is believed that a detailed framework for a way forward has been worked out for merger of two budgets.
The panel is understood to have advocated that the General Budget should have a separate annexure for the rail budget detailing the grant, expenditure and new projects for the next fiscal.
(With PTI inputs)
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