The 92-year-old practice of presenting a separate Rail Budget is set to come to an end from the next fiscal, with the Finance Ministry accepting Railway Minister Suresh Prabhu’s proposal to merge it with the General Budget.

According to railways, the Finance Ministry has now constituted a five-member committee comprising senior officials of the Ministry and the national transporter to work out the modalities for the merger. The committee has been asked to submit its report by August 31.

• The move is significant as political heavyweights, especially after coalition governments post 1996, have used the Rail Budget to hand out goodies and for their own image building.

Once the Rail Budget is merged with the General Budget, the Indian Railways will be like any other government department that receives budgetary support from the Finance Ministry.

• Indian Railways has the potential to contribute around 2-2.5 per cent of the GDP but for that it needs investment, he said, adding that the national transporter require huge investment for its survival as the department has a huge burden of 7th Pay Commission of about Rs 30,000-40,000 crore alone being the largest employer in addition to the subsidy burden of Rs 34,000 crore.

• Indian Railways has one of the largest railway networks of the world and is the largest employer in the country. Every year, a Rail Budget, separate from the Union Budget is presented in the Parliament few days before the General Budget.

• A separate budget for rail started in 1924 during the British rule. Indian Railways was considered a great asset of that time so a separate budget made sense, but as the Indian economy grew exponentially, the Rail Budget seemed quite smaller than the main budget. But the government has not yet abolished the separate budget for Indian Railways.

• Indian Railways runs 13000 trains per day on 63,000 kilometer of track and carries 23 million passengers, equivalent to population of Australia.