End of 92-Yr-Old Tradition: India to Merge Rail & General Budgets

Distinction between plan and non-plan expenditure will also be ended from next year.

(Photo altered by The Quint)

India on Wednesday decided to do away with a 92-year-old tradition of a separate general and railway budget by unifying them and doing away with differentiating plan and non-plan expenditure.

From coming year, the railway and the general budget will be amalgamated. There will be only one budget. And secondly, distinction between plan and non-plan expenditure will be ended from next year.

Arun Jaitley, Finance Minister

Non-plan expenditure is what the government spends on the so-called non-productive areas, such as salaries, subsidies, loans and interest, while plan expenditure pertains to the money to be set aside for productive purposes, like the various projects of ministries.

Finance ministry officials said after the abolition of the Planning Commission, the relevance of plan and non-plan expenditure is lost and a better indicator of productive and general expenditure will be a distinction under the heads of revenue and capital.

(With inputs from IANS.)

Video Editor: Sandeep Suman