Railway Budget: Finance Minister Nirmala Sitharaman will present the country’s general budget on 1 February i.e. Sunday. This will be his ninth consecutive budget as Finance Minister. First he presented the budget in 2019. Every person, every sector, every class of the country has high expectations from the budget presented tomorrow. Meanwhile, we are going to tell you about an old tradition related to the budget, which has now been broken.

This practice started during the British era

We know that the budget includes many different sectors like defence, health, education. Railway budget also comes under this, but do you know that earlier the railway budget was presented separately. The tradition of presenting the Railway Budget separately started in 1924 during the British era.

During that time, it was argued by the Special Committee that the budget of Railways is very important and big, hence it cannot be handled under the normal budget. Even after the country gained independence in 1947, this tradition continued without any interruption for 92 years. Under this, the Railway Minister used to present the Railway Budget a few days before the Union Budget, which contained details of earnings, expenditure, fares and freight rates.

Why did the decades old tradition end?

Till the financial year 2016-17, the Railway Budget was presented separately before the Union Budget. In 2017, the BJP government came to power at the Center under the leadership of Prime Minister Narendra Modi and since then the Railway Budget was merged with the General Budget of the country. In fact, the campaign to abolish the separate railway budget gained momentum in 2016 following the recommendations of a committee headed by economist Bibek Debroy under NITI Aayog.

In a paper written by Debroy and economist Kishore Desai, the committee argued that India was the only country that was still following this practice and that it no longer served any practical purpose in modern public finance. In the paper, it was advised to include railway finance in the Union Budget to modernize financial management and present a clearer picture of government expenditure.

This proposal of the committee was discussed within the government. The then Railway Minister Suresh Prabhu supported the committee’s proposal. Later, Finance Minister Arun Jaitley took the matter to Parliament, in which it was also discussed in Rajya Sabha. Jaitley presented the first integrated union budget for 2017–18, officially ending the separate railway budget.

What was the benefit of this?

There were many benefits of including the Railway Budget in the General Budget. First of all, the time spent in preparing it and debating it in Parliament was saved. Due to this, the dividend received from the Railways to the government ended, which reduced the financial burden on it.

Its objective was also to create better coordination between the transport sector, railways, roads and waterways, so that infrastructure planning could be done under a single unified framework. This also brought a lot of transparency because now the income and expenditure of the central government was shown in a single document, making it easier for the Parliament and investors to scrutinize the finances.

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Railway Budget 2026: Finance Minister Nirmala Sitharaman is going to present the Union Budget on Sunday, 1 February 2026. This will be his ninth consecutive budget. He presented his first budget in 2019. One of the most important reforms in the history of India’s budget was the merger of the Railway Budget with the Union Budget. This ended the practice that had been going on for 92 years.

Railway Budget and Union Budget

In India, the Railway Budget is being presented along with the Union Budget since 2017. The first joint budget was presented by the then Finance Minister Arun Jaitley on 1 February 2017. Since that year, instead of two separate financial statements, only one consolidated budget speech is given in Parliament on 1 February at 11:00 am.

Why was the railway budget different earlier?

The tradition of a separate railway budget started in 1924 during the British rule. This decision was taken after the recommendation of the Acworth Committee. At that time Indian Railways accounted for about 84% of the total government expenditure. Because of this, it was very large and difficult to manage within the normal budget.

Dominance of railways in colonial economy

In the pre-independence era, railways were the backbone of India’s economy and administration. Freight traffic, passenger travel, military logistics and revenue all depended heavily on the railways. This large financial impact justified a separate rail budget.

What changed over the years?

With economic diversification and rise of the rest sector, the share of railways in the total budget gradually started decreasing. Till 2016, Indian Railways accounted for only about 15% of the total government expenditure. There is no longer any practical purpose in maintaining a separate budget.

decision to merge budgets

In 2016, a committee headed by NITI Aayog member Vivek Debroy recommended merging the Railway Budget with the Union Budget. The government accepted the proposal citing the need for simplification, transparency and better financial management. This decision formally ended a tradition that had been going on since 1924.

Benefits of rail budget merger

There have been many benefits from this merger. This has simplified the budget making process and allowed the Finance Ministry to allocate resources more efficiently. A big relief for Indian Railways was that it no longer had to pay annual dividend to the Central Government. This made funds available for infrastructure upgrades, security improvements and modernization.

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Railway sector is going to be the top priority of the government in Union Budget 2026, where the focus will be on Safety, Freight Corridor and Passenger Comfort. In the last budget, there was a capex of ₹ 2.55 lakh crore for Railways, whereas this time an allocation of up to ₹ 2.7 lakh crore can be received. There will be an emphasis in the budget on increasing the number of new railway tracks, ‘Amrit Bharat’ trains and general coaches. In view of the recent railway accidents, a budget hike of up to 25% is expected for the indigenous anti-collision system ‘Kavach’, so that more routes can be made safe. To upgrade the passenger experience, withdrawal of Vande Bharat Sleeper trains, Vande Metro services and Senior Citizen Concession is possible. On the freight side, East-Coast and North-South Dedicated Freight Corridors will make logistics cheaper and passenger trains faster.