According to Prabhu, the amalgamation will not impact the functional autonomy or the distinct identity of the railways.
“Rail budget was earlier presented by Railway Minister in India, the practice was only followed in India,” Prabhu said.
“Keeping in mind the importance of the railways, the Cabinet Committee of Economic Affairs (CCEA) today (Wednesday) decided to merge the general budget and the rail budget together.”
The minister endorsed the move as a historic step which will help meet global benchmarks and best practices.
“The merger would also facilitate an integrated and seamless approach towards transportation strategy in the country,” the minister elaborated.
Prabhu maintained that the distinct identity of railways will remain intact.
On the financial implication of the move, the minister stated that it will help railways raise extra capital expenditure which will allow it to enhance connectivity in the country and boost economic growth.
Besides, the railways would also not need to pay dividends on the allocated capital expenditure amount.
The move will be implemented from the coming year will see an end to a 92-year old tradition started in 1924 of presenting a separate budget for the Indian Railways.
“From the coming year, the railway and the general budget will be amalgamated. There will be only one budget,” Finance Minister Arun Jaitley said here after a Cabinet meeting.
The decision to merge the rail and the general budgets was mooted by Railway Minister Suresh Prabhu and endorsed by NITI Aayog member Bibek Debroy.