Railway budget focuses on fares, services

By Rajkumar Ray and Manoj Kumar

NEW DELHI (Reuters) - Railways Minister Mamata Banerjee unveiled a mix of populist measures, including cheap tickets for the poor and no increase in freight or passenger fares, as well as steps to boost the sprawling system's efficiency and finances.

Friday's railway budget speech underscored the Congress party-led government's focus on "inclusive growth" after it was reelected by a wider-than-expected margin in May.

Prime Minister Manmohan Singh's government will present its budget on Monday.

"The old mindset of economic viability should be substituted by social viability," Banerjee said in an address to parliament.

Banerjee, looking to take advantage of the railway's vast property holdings, said land along the new freight corridor would be put to productive use, and also said the railway operator will resume issuance of tax-free bonds.

Over the five years through March 2009, India's railways generated a cash surplus of about $18.8 billion.

She also said the group will build a 1,000 megawatt electricity plant -- India suffers from a severe energy deficit -- to power electric locomotives. She said the system would look to introduce double-decker trains, and take advantage of its fibre-optic communications network. "I visualise an eastern industrial corridor developing alongside the eastern dedicated freight corridor," she said in the ministry's annual budget address.

Arun Kejriwal, research strategist at broker KRIS in Mumbai, said the speech gave a clue to the government's policy leanings.