Separation of Railway budget
Also called: Railway budget, Railway budget 1924 · Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Beyond NCERT
Meaning
The separation of the Railway budget was a 1924 reform. It took the railways' income and spending out of the General budget, which is the main budget for the rest of the government, and put them in a budget of their own. The Acworth Committee (1920–21) had led to it. The aim was to give the General budget a fixed, assured share from railway revenues every year, so the government's main accounts stayed steady. The reform changed how railway money was handled. It did not change whom the railways mainly served under colonial rule. The two budgets stayed apart for over 90 years, until the Railway budget was merged back into the Union Budget in 2017.
Example
From 1924 until 2016, the Railway Minister presented a separate Railway budget each year, before the main budget. In 2017, on the Bibek Debroy panel's recommendation, this practice ended. Since then, railway figures are part of the single Union Budget, which is presented on 1 February.
Don't confuse with
- Merger of the Railway budget (2017): this was the reverse step. Railway finances went back into one Union Budget, while the 1924 reform had kept them apart.
- Abolition of plan/non-plan expenditure (2017-18): this was a separate reform from the same period. It changed how spending is classified, not whether railways have their own budget.