The Narendra Modi government’s decision to end two outdated accounting exercises is welcome. An independent budget for the railways is a colonial legacy. The distinction between Plan and non-Plan expenditure is irrelevant when comprehensive planning has been buried.
The railways will now hopefully be able to get more money from the general government budget for new projects rather than be constrained by its revenues.
Moving the power to price railway tickets and freight rates to an independent regulator would also be a good idea. This would boost the railways’ ability to raise more internal resources.
One of the innovations introduced by the finance minister in his latest budget speech was to give a combined number for new investments on road and railway projects.
It is time India started thinking of logistics in an integrated manner. Would a suggestion to eventually merge the railways and roads ministries into a transport ministry be too radical?