India pledges more comfort on creaking rail network

NEW DELHI (AFP) - India on Tuesday pledged better catering, comfort and cleanliness as part a US$11.7 billion (S$14.5 billion) budget for Asia's oldest rail network along with steps to help stop trains mowing down people and elephants.

Railway Minister Pawan Kumar Bansal hiked freight rates by five percent in his budget for the sprawling state-run network, India's main form of long-distance transport despite competition from airlines and roads.

For the first time, the cost of shipping goods will be linked to fuel prices, Mr Bansal added, in a move highlighting the Congress-led government's resolve to rein-in deficit-ballooning subsidies for publicly owned companies.

He held fares steady after hiking them last month for the millions of train passengers who travel daily but said they would have to rise in future and insisted the troubled service must be made "financially sustainable".

The annual budget for one of the world's largest rail networks is presented separately due to huge freight and passenger volumes.

It will be followed on Friday by the national budget that economists expect to feature the most belt-tightening in years in a bid to close a widening deficit gap and boost investor confidence.