New Delhi: Hailing as "pragmatic" Laloo Prasad's maiden Railway Budget that spared any freight and fare hike, the Indian industry today (July 6, 2004) said that Government should have cut freight tariff to attract traffic and generate more revenue as part of rationalisation and reform measures.

Responding to proposals particularly relating to concessions announced for freighting heavy machinery and investments for rolling stock, the stock markets reacted favourably with the reflective Bombay Stock Exchange index spurting by about 85 points to close the day at 4928.59.

Some of the industry associations were sceptic as to how Laloo would generate "resources to support the Railway's proposed drive for adequate safety measures and undertaking a modernisation programme."

Federation of Indian Chambers of Commerce and Industry (FICCI) complimented the Minister for choosing to keep the freight rate stable and thereby earn more from attracting additional revenue-earning goods traffic.

However, Confederation of Indian Industry (CII) felt that the Minister could have used the opportunity arising from buoyancy in the economy to earn more freight traffic, which it lost to road sector by reducing its goods tariff.

Presidents of both the FICCI and CII -- Y K Modi and Sunil Munjal -- were unanimous is suggesting that Government should have taken more steps to reduce "cross subsidisation" that was making freight tariff expensive because of which railways was losing its market share to road sector.