Finance Minister Arun Jaitley on Tuesday indicated that no populist measures will come through for the railways when its budget will be merged with the general budget from the next fiscal.
"Around the world that organisation is successful which follows a financial model wherein consumers pay for the services they use," Jaitley said here at the national conference on Accounting Reforms in Indian Railways organised by Confederation of Indian Industry (CII).
He said populism required that consumers do not need to pay for the services they use but these were not the principles "on which the largest operator of transport can work".
"We aim for a creation of Railways as a service organisation which is commercially able to sustain itself and also provide world class quality and infrastructure."
The Finance Minister said dangers of losing out at competition with other modes of transport had started reflecting in the Indian Railways account books.
"Because of this pressure, Railways was keen that Finance Ministry takes over its budget."
The government earlier this year announced the merger of the rail budget with the general budget, putting an end to the over 92-year old practice.
On the reforms in accounting services of the Railways, Jaitley said these must reflect the actual investments being made.
"Accounting services should show the reality. New accounting reforms being suggested will reflect that," he said.
From 2019, the Indian Railways intends to shift to accrual-based accounting for a more precise assessment of costs and investments.