Difference between railway budget and general budget? answer in simple words

Explanation:

The practice of a separate Railway Budget started in 1924 during the British rule in India. During those days, Railways was the largest industrial asset of the country and used to occupy a significant portion of the budgetary allocations (~75 to 85 %). Since the Railways then constituted such a large portion of the General Budget, it was recommended by the British officials to separate the Railways from the general budget solely for the purposes of better policy formulation and implementation.

Now the Railways constitute ~4% of the country's total General Budget allocations. However, the practice of presentation of a separate Railway Budget, two days before the General Budget is still continued majorly for political gains. Railways is called the lifeline of the nation and it has been said that the Railways present the true picture of India. Indian Railways directly influence the life of millions of Indians.

With 1.3 million employees, the Indian Railways is among the world's largest employers. It has added about 260,000 staff in the past five years. It carries over 13 million passengers & 1.3 million tones of freight everyday. When an enterprise has an ability to create such a huge impact, it attracts attention of everyone including the government and the politicians.

The politicians since independence have cashed in on the Railways for political gains. A separate Railways budget allows them to announce trains, extension of routes etc. for a particular region/state and then take credit for the same. Therefore, even though the separation of Railways from General Budget may have been a necessary governance step at the time of introduction, it is now a tool for political gains.