* China streamlines cabinet, looks for efficiencies
* Scandal-plagued Railways Ministry to be dissolved
* Family Planning Commission to be merged with Health Ministry (Adds fresh quotes and corruption statistics)
By Michael Martina and Sui-Lee Wee
BEIJING, March 10 (Reuters) - China unveiled a government restructuring plan on Sunday, cutting cabinet-level entities by two and dissolving its powerful Railways Ministry, as the country's new leaders look to boost efficiency and combat corruption.
The reforms mark the biggest reduction in ministries since 1998 when then-premier Zhu Rongji oversaw the overhaul of the State Council, and coincides with growing public concern over transparency and overlapping bureaucracies.
The government will join the Family Planning Commission -- the agency that controls the controversial one-child policy -- with the Health Ministry, and strengthen the powers of the food and drug regulators, it said in a report released during the on-going annual meeting of parliament.
"Currently, numerous operational, organisational and division of labour problems exist in State Council ministries," State Council Secretary-General Ma Kai said in a speech on the plan to the National People's Congress.
Ma added that "breach of duty, using positions for personal gain and corruption" under the structure had not been effectively constrained.
China's president-in-waiting Xi Jinping and premier-designate Li Keqiang assume their new roles after the annual congress concludes next week.
The Railways Ministry and Family Planning Commission have been particularly unpopular, and their restructuring was widely expected.
The Railways Ministry has faced numerous problems over the past few years, including heavy debts from funding new high-speed lines, waste and fraud.
Railways planning will be coordinated under the broader transport ministry. The government has pledged to open the rail industry to private investment on an unprecedented scale.
Family planning officials, meanwhile, have been known to compel women to have abortions to meet birth-rate targets. High profile cases have sparked national fury, such as when a woman in inland Shaanxi province was forced to abort her 7-month pregnancy last year.
Some analysts have said the merger of the health and family planning agencies would be a blow to the political base needed to maintain the one-child policy, which many demographers say should be relaxed.
The report said family planning must continue "on the basis of stable and low birth rates", but added that policies would be "improved". China's one-child policy is still generally enforced, although there are a number of family situations exempt from the rule.
A recently retired official from the Family Planning Commission who maintains close ties with the agency, said the merger does not mean the commission's power will be reduced.
"For such a long time, hundreds of millions of people had to have contraception and birth control, this kind of work is necessary. But it's possible that there will be fewer things done by force," the retired official said.
The restructuring plan, which will cut cabinet-level agencies to 25, will also boost the role of the food and drug regulators, placing it within the cabinet in response to an almost never-ending series of scandals over product safety.
Prosecutions for producing or selling fake drugs or toxic food jumped to more than 8,000 in 2012, more than five times the number in 2011, according to a report by the office of China's top prosecutor also issued on Sunday.
China's maritime enforcement agencies will be consolidated, as well, giving the National Oceanic Administration control over coast guard forces, customs police and fisheries enforcement as China faces growing tensions with Japan and South East Asian neighbors over disputed seas.
Tokyo and Beijing have sent patrol boats in a game of cat-and-mouse in the waters near disputed islands in the East China Sea, and coordinated control over China's vessels could reduce the risk of an escalation sparked by unintended collisions.
One parliament delegate said on the sidelines of the congress session that the move was not linked to the military.
"Our coastline is very long and our oceans cover a vast area. There is no military thinking behind it," said Zhang Guibai, who is also a military officer.
China will also merge its two media watchdogs -- the General Administration of Press and Publication and the State Administration of Radio, Film and Television -- and restructure the National Energy Administration, Ma said.
(Reporting by Michael Martina, Shen Yan, Sui-Lee Wee and Ben Blanchard; Editing by Jonathan Standing and Michael Perry)