NEW DELHI - India Inc lauded the rail budget tabled in parliament Friday, but said Railway Minister Lalu Prasad has not responded to the prevailing slowdown in the country’s economy that could have been somewhat cushioned by a cut in freight rates.

‘The Railway Minister has presented a mixed budget,’ said Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry (FICCI).

‘The minister has refused to respond to the current slowdown by not cutting freight rates and helping Indian industry and economy in the midst of a slowdown,’ he added.

‘However, by stepping up spending for financial year 2009-10 to Rs.37,900 crore (Rs.379 billion) and by proposing a massive investment for the 11th Plan period the railways could set the growth trigger for certain sectors like steel, engineering and construction.’

With both passenger and freight earnings growing at double-digit rates, the railways will invest Rs.2.3 trillion (Rs.2.3 lakh crore) in the next 11th Five-Year Plan.

The minister has proposed to more than double the wagon production target from 6,000 tonnes to 15,000 tonnes. Also, the capacity of passenger train and goods train will be increased 22 percent and 78 percent respectively.

FICCI said this would be particularly helpful when the economy comes out of the current slowdown and once again hits the high growth trajectory.

Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), echoed the view that freight corridors, containers and improved passenger amenities that were announced in the budget would go a long way in making India’s railway network more modern and efficient.

However, the budget did not announce any public-private-partnership (PPP) projects that the industry was expecting, Banerjee said.

The industry said the ‘forward-looking’ budget would create a win-win situation for all - the railways, wagon manufacturers, the heavy industry sectors and the people.

Added Sajjan Jindal, president of the Associated Chambers of Commerce and Industry in India (Assocham): ‘A thumping majority of Yadav’s budget are user-friendly as fares have gone down and 43 new trains are proposed to be added in existing railways’ fleet, which will provide convenience to railway passengers and its freight users.’

The lobby also said freight rates could have been cut.