Presenting the vote-on-account for expenses in the first four months of next fiscal, he also announced reduction in the fares of ordinary passenger trains by Rs one for fares costing upto Rs 50 for journey above 10 km.

The interim budget makes no changes in relation to freight rates.

Normally, the interim budgets do not carry any financial proposals in view of the fact that it is a vote-on-account ahead of the General Elections.

Recalling that he had decided to reduce the second class fares of all mail, express and ordinary trains by 5 per cent for tickets above Rs 50 last year, Prasad said respecting the aspirations of the long distance passengers he has decided to reduce the second class and sleeper class fares of all mail and express and ordinary passenger trains by two per cent for the ticket costing more than Rs 50.

He said during the last four years, he had reduced the fares of AC First class by 28 per cent and AC II tier by 20 per cent.

Even as air travel is reportedly reflecting reduction in number of passengers due to economic slowdown, there has been a significant increase in the number of passengers of these classes on the Railways.

"Therefore, I have decided to reduce the fares of AC First Class, AC II tier and AC III tier and AC Chair Car by two per cent," he said admist thumping of desks by members of ruling benches in Lok Sabha.

The Minister said since the fare for rail travel for 10 km and below has already been reduced from Rs 4 to Rs 1, this reduction will not be applicable for second class rail journey upto 10 km.

He announced introduction of 43 new trains and extension of services of 14 others. Frequency of 14 trains has also been increased.

In the wake of his visit to Japan, Germany and France to see the running of trains at speed between 300 and 350 km per hour, Prasad said action is on for examining feasibility of running bullet trains between Delhi-Amritsar, Ahmedabad-Mumbai-Pune, Hyderabad-Vijayawada-Chennai, Chennai-Bangalore, Ernakulam and Howrah-Haldia.

Action would also soon be started for conducting a pre-feasibility study to run bullet trains between Delhi and Patna.

Surveys for 14 new lines, gauge conversion of three and doubling of eight railway lines are proposed to be undertaken.

The Budget estimates for 2009-10 project a freight loading target at 910 million tonnes -- an increment of 60 million tonnes on 2008-09 -- and the number of passengers is likely to grow by 7 per cent.

Gross Traffic Receipts (GTR) is estimated at Rs 93,159 crore, an increase of Rs 10,766 crore over revised estimate of 2008-09.

Ordinary working expenses have been budgeted at Rs 62,900 crore to cover the full year impact of Sixth Pay Commission recommendation and the payment of 60 per cent arrears due in 2009-10.

Dividend payable to General Revenues has been kept at Rs 5,304 crore at the current applicable rates. Budgeting ratio has been pegged at 89.9 per cent and annual plan outlay for the next year envisages an investment of Rs 37,905 crore.

The Budgetary support from General Revenue has been proposed at Rs 9,600 crore excluding Rs 1,200 crore to be received from the Central Road Fund.