New Delhi: Buoyed by the Rs 855 crore savings due to cost cutting measures this fiscal, the Railway Budget on February 26 is likely to come out with innovative schemes to woo freight from road traffic and tourists besides a marginal five to six per cent hike in passenger fares to meet fuels' costs.

Billed to be a soft Budget due to Assembly elections, the Budget will carry further rationalisation of freight and passenger fares through phased cut in cross- subsidisation.

The Budget, second in-a-row for Railway Minister Nitish Kumar, will come out with a "white paper" on Railway safety, besides measures to modernise the overused infrastructure that has far exceeded the freight target by 7.87 million tonnes in the first 10 months of the current fiscal.

Official sources said a new train to the Buddhist circuit covering Puri, Bodh Gaya, Varanasi, Sarnath, Gorakhpur is likely to be introduced, besides rationalisation of Shatabdi and Jan Shatabdi trains.

"This is sought to be done through shifting unviable Shatabdi train routes to Jan Shatabdi to attract middle class users," the sources said.

With freight traffic earnings going up to Rs 23,000 crore during April-January of 2002-03 as against Rs 20,000 crore during the corresponding period of last year, the Railways will come out with incentives for fast movement of long distance freight traffic in three to five days.

Besides, it may also work out a scheme by which penalty could be slapped for delayed arrivals in a bid to attract freight traffic.

Since passenger services constituted nearly 60 per cent of the transport output, but contributed only 32 per cent of its revenue in 2000-01, even a marginal improvement in this direction would ensure bringing it closer to cost of service, thereby leading to high savings.

According to a study by apex trade body Associated Chambers of Commerce and Industry of India (ASSOCHAM), losses due to passenger and other coaching services stood at a whopping Rs 4,875 crore.

Kumar is also constrained to undertake massive hike in fares in the wake of the recent meeting senior Bharatiya Janata Party (BJP) leaders had with him where they urged for a soft Budget in view of the Assembly elections in states like Madhya Pradesh, Rajasthan and Delhi in the year-end, where the party has high stakes.

The Railway Minister's speech could also see unveiling of massive loans from the Asian Development Bank (ADB) for Railway modernisation and golden quadrilateral connecting four metros.

The budgetary support for 2003-04 is expected to be pegged at Rs 5,840 crore, sources said.

The innovative schemes in the freight sector are also necessitated due to the increased global competition and the need to make export schemes fully successful.

The shortfall in fare earnings could be made up by reverting to telescopic structuring of fares, wherein the difference in fares between long distance and short distance is made shorter.

As part of their innovative efforts, Railway officials have also prepared a fare structure that provides a cut in fares during off-season and restoration of the original passenger fares during busy-season to meet the competition from airlines.

Considering the trend of shooting the target of drawing from the non-lapsable Rs 17,000 crore special safety fund to meet its infrastructure projects during the last two years, the Railway Minister will have to find other avenues to make up for the shortfall.

The safety fund is being utilised for four-year programme of track renewal and strengthening and improvement of old bridges.

The ADB has reportedly asked the Indian Railways to develop a route map, on the basis of which the bank will process $ 300 million loan, which would be followed by a second tranche of $ 300 million in 2005.

Suggestions have also been made to take up commercial exploitation of huge surplus of Railway land with the Railways.

This process was initiated with lot of expectations in the early 90s.

Rationalisation of freight rates is also essential in the wake of major chunk of freight traffic coming from eight major commodities – coal, fertiliser, cement, petroleum products, food grains, finished steel, iron ore and raw material to steel plants.

PTI