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As preparations gather pace for the Union Budget 2027–28, the Finance Ministry has begun its annual exercise of consultations and public outreach. In a bid to make the budget process more participative, citizens have been invited to share their ideas and suggestions on policies that could shape India’s growth and development.

According to a post by MyGovIndia on X (formerly Twitter), people can submit their views on the MyGov website, giving them a direct channel to influence national financial planning. 

Alongside this public consultation, Finance Minister Nirmala Sitharaman has also held pre-budget meetings with economists, farmers and agriculture experts, continuing the tradition of stakeholder engagement ahead of the annual fiscal exercise.

While most attention is firmly fixed on tax changes, spending priorities and fiscal maths, one component of the budget that is always closely tracked is Indian Railways. Even though there is no separate Railway Budget anymore, railway allocations remain a key focus area every year.

The Big Shift of 2016: One Budget Instead of Two

The merger of the Railway Budget with the Union Budget dates back to 2016, when the government decided to do away with the decades-old practice of presenting a standalone Railway Budget.

The decision followed recommendations made by a committee chaired by Bibek Debroy of NITI Aayog. The panel argued that treating Indian Railways as a separate financial entity was no longer efficient and added unnecessary complexity to government finances. 

These recommendations were later reinforced through a white paper titled ‘Dispensing with the Railway Budget’, which made the case for ending the separation.

The proposal was endorsed by then Railway Minister Suresh Prabhu and taken forward to Finance Minister Arun Jaitley. After discussions in the Rajya Sabha, the government announced that from 2017 onwards, railway finances would be presented as part of the Union Budget rather than through a standalone document.

What Changed After the Merger

Importantly, the merger did not mean that Indian Railways stopped functioning as a commercial organisation. The railways continue to operate as a departmental undertaking with their own revenue streams and expenditure responsibilities. The difference lies in how those finances are now presented and scrutinised.

All railway-related grants, capital expenditure and budgetary support are now folded into the Union Budget. This has placed railway finances under the broader oversight of the Finance Ministry, ensuring greater consistency in accounting and fiscal discipline.

Earlier, the Railway Budget often stood out for announcing fare changes, new trains and ambitious projects, sometimes drawing criticism for being more populist than practical. Over time, concerns were raised that short-term announcements were taking precedence over long-term financial sustainability.

Why the Merger Was Seen as Necessary

One of the main reasons for merging the two budgets was to align railway planning more closely with India’s overall economic strategy. Running two parallel budget exercises often led to coordination challenges, with planning, approvals and funding decisions spread across different processes.

The separate Railway Budget also faced criticism for encouraging politically driven decisions, such as postponing fare rationalisation or announcing projects without assured funding. By integrating railway finances into the Union Budget, the government aimed to bring greater transparency and reduce the scope for such distortions.

Another key objective was efficiency. With a unified budgetary framework, fund allocation became smoother, helping railway projects move faster from planning to execution. This was particularly important as India stepped up its focus on infrastructure development and modernisation.

Even without a separate Railway Budget speech, railways remain one of the largest components of government spending. Budget documents continue to provide detailed break-ups of railway allocations, capital expenditure and performance targets.

For investors, policymakers and commuters alike, railway announcements in the Union Budget still carry significant weight, as they reflect the government’s priorities in connectivity, logistics and economic growth.