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What Led To The Merger Of Railway And Union Budget In 2017

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The Union Budget andRailway Budgetwere presented separately until 2017 when the government ended the 92-year-old practice and merged them.
The merger of the Railway Budget with the Union Budget in 2017 was a significant reform aimed at enhancing efficiency and transparency in financial management. Historically, the Railway Budget was presented separately due to the Railways' status as a commercial department, a practice that began in 1924 under British rule. However, this separation led to several issues, including cross-subsidization, where profits from freight were used to subsidize passenger fares, and a lack of transparency in financial reporting. The merger was proposed to address these inefficiencies, eliminate the artificial separation of railway finances from the general government budget, and allow for a more integrated approach to infrastructure development and financial planning. The decision was part of broader economic reforms and was influenced by recommendations from various committees over the years, culminating in the acceptance by the Narendra Modi government in 2016, with the first merged budget presented in 2017 by then Finance Minister Arun Jaitley.

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