In line with his efforts to give a populist touch to his maiden budget, Railway Minister Lalu Prasad Yadav might affect a modest hike in upper class passenger fares and freight rates, but leave lower class fares untouched in the Railway Budget for 2004-05.

Yadav would be presenting the budget in the Lok Sabha at 1200 hours on July 6. This would be the first budget by the ruling United Progressive Alliance government after it came to power.

Rail Bhavan sources indicated that there may not be any major hike in ordinary and suburban train fares in order to give some cushion to commuters.

The hikes have to an extent been necessitated due to the recent increase in the prices of coal, steel and diesel. The hike in the prices of diesel itself had put a burden of over Rs 1,000 crore (Rs 10 billion) on the railways, they said.

The marginal hike in upper class fares is not expected to be more than 5 per cent, sources said, adding that there might be rationalisation of tariff for air-conditioned class keeping in mind seasonal rise and fall of occupancy rate in long distance trains.

Sources cited the example of reduction of fares by 10 per cent from July 15 to September 15 last year by the then Railway Minister Nitish Kumar in Rajdhani, Shatabdi and Janshatabdi Express trains in order to increase the occupancy, which they claimed was a 'runaway success.'

This 'flexi-tariff' may also be extended to air-conditioned class for long distance mail and express trains in order to push the revenue from passenger front upwards, they said.

The sources indicated that there might be introduction of some new long distance trains and unreserved trains to enable labourers from labour-intensive areas to go to growth centers like Punjab, Delhi, Mumbai, Coimbatore and Ahmedabad.

Efforts would also be made to introduce, at least on weekly basis, the 17 Sampark Kranti Express trains, which were announced by the previous National Democratic Alliance government.

The sources said that special emphasis would be laid on lifting commodities like coal, steel, iron ore, cement and POL (petroleum, oil and lubricants) in order to increase revenue.

They pointed out that though the freights lifted by the railways had surpassed the target set, the revenue earned through them was only marginal because of low-rated commodities.

There are indications that the budgetary support from the finance ministry is likely to go up by Rs 2,000 crore (Rs 20 billion) in keeping with the commitment made by the Manmohan Singh government in its Common Minimum Programme more and more public investment in infrastructure segments like railways and road transport in order to reach out to people in remote and other backward areas.

The budget is also likely to reflect completion of pending projects.

The railway minister is also most likely to look at the performance of the public sector units attached with the railways and might announce dismantling those units whose performance are not up to the mark. Railways have nine public sector units with it.

Safety aspect is likely to get top priority in view of recent train mishaps, robberies and other such incidents. The corporate safety plan, introduced by the previous government, would be implemented in letter and spirit.

The minister is also likely to unfold a programme for viable commercial utilisation of unutilised railway land in order to mobilise additional resources.

The ministry had already in its possession a report of the parliamentary sub-committee which had recommended commercial utilisation of unutilised railway land. It had envisaged earnings to the tune of Rs 36,000 crore (Rs 360 billion) by way of utilisation of surplus land with the Railways.

The budget might also envisage construction of 100 budget hotels at various places.