Rationale for Merger

1. During the British rule Railways took up to 85% of the yearly budget while now it has gone down to about 15% only.

2. Now that the Railway Budget will be introduced along with the Union Budget, there will be less wastage of time when a new policy is to be initiated and implemented.

3. Separate Railway Budget became a tool for corruption, inefficiency, and populist measures. As a result, the successive Railway Minister used to find it hard to increase fairs in line with the increasing operational costs. This was the primary reason for cross subsidization (where the passenger traffic is subsidized by the freight traffic).

4. The Railways would not need to pay Rs 10,000 crore annual dividend to the union government. This annual dividend can now be used for development of Indian Railways.

5. Synergetic transportation policies would henceforth be possible because the Finance Ministry would be responsible for allocation of resources to all kinds of transportation system.