Rail Budget's 92-year-old journey set to end

Rail Budget's 92-year-old journey set to end: Likely to be merged with Union Budget from FY18...

Integrating budgets

This refers to Shine Jacob’s report “Rail Budget’s 92-year-old journey set to end” (Business Standard, August 14). This need to be seen as part of the reform process, which, hopefully, is set to gain momentum with the passing of GST legislation in Parliament. Many components of economic reforms including structural reforms in the financial sector which is now under way were getting stalled due to various hurdles, some of them emanating from the weakness of alliances in power at the centre and in some larger states till recently.
The acceptance of ‘cooperative federalism’ by the Prime Minister as a principle which should guide broad approaches on national level issues and emergence of NITI Aayog as a body which will coordinate research and planning efforts for economic growth with a long term vision are positive signals for one to expect more speed in implementation of reforms in the coming days.
In recent years planning and budget exercises, both at Centre and in most of the states, had reduced to mere arithmetical juggleries to assess how much resources can be mobilised with ease and how the resources mobilised can be distributed in a manner that will ensure the governments in power remaining ‘popular’. Once Railway Budget also gets merged into Union Budget and major taxes get aggregated through the mechanism of GST, central government’s responsibility to plan resources and ensure distributive justice across geographical regions and sectors rises.
Among other things, Centre will have to ensure:
·      
Windfall gains are used for investment purposes only and are not used for freebies to satisfy vote banks.
·      
Gradually, provisions are made for future liabilities including expected and unexpected heavy expenditure which may not be met from ‘current’ revenues. Provisions for meeting future pension liabilities (which are now being met on a “Pay As You Go” basis) and other retirement benefits should, ideally form part of current revenue expenditure.
·      
The claims of geographical areas which are not industrially developed and more importantly where literacy level is below the national average should be met, preferably from a dedicated fund to be created for the purpose.
·      
A prices, wages and income policy covering government and private sectors should guide the market and employers.

M G Warrier, Mumbai

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