New Delhi, February 25: Buoyed by a revenue surplus, Railway Minister Lalu Prasad may propose a reduction in second class and upper class fares in his budget for 2007-08 on Monday as well as some slashing of freight rates to help control the prices of essential commodities.

"There could be a token reduction in sleeper class fares, suburban fares as also Monthly Season Tickets. The minister may also marginally reduce all AC-class fares in line with last year's strategy, when he slashed by 18 per cent and 10 per cent the first AC and second AC class fares," a Rail Bhawan source indicated.

The sources said Prasad can spring surprises keeping in view the fact that reduction in AC class fares last year benefited Indian Railways, which is facing tough competition from airlines in the passenger sector and road transport in the freight segement.

He may also announce a reduction in freight fares, particularly in transporting essential commodities to check their prices and help the aam aadmi, they said.

However, the sources said Prasad may not affect changes in fare structures and go down in history as a Railway Minister who had not increased passenger fares for four consecutive years and still managed a huge revenue surplus.

Prasad may also announce the introduction of a number of air-conditioned Garib Raths and a major role for private players in modernising and developing infrastructure for the railways.