Railway Minister Lalu Prasad on Monday received a thumbs up from India Inc for his ministry's budget for 2007-08, which they termed as positive and one that would serve as an example for other public sector units.

"This is a good news for India and we wish that other public service areas like education and health would also follow the Railway example," FICCI president Habil Khorakiwala said on Prasad's decision to cut passenger fares, while leaving freight rates largely unchanged.

He said the railway minister has put his bet on a buoyant economy and the decision not to tinker with freight rates largely, while cutting passenger fares suggested railways was now working like a well-run private sector corporation.

"The minister's thrust on modernisation, technical innovation and better resource utilisation should lead to higher market share in both goods and passenger segments for the Railways," Khorakiwala added.

Leading chamber -- the Confederation of Indian Industry (CII) -- also welcomed measures like increased containers and freight services stating they would not only help the industry but also benefit general public.

The freight rate cut on petrol, diesel and iron ore would have an overall positive impact on the economy, CII chairman railways equipment division J P Choudhary said.

"The minister is taking innovative measures and if this tempo continues, the Railways will be one of the pillars of our growth in the coming years," he added.

Assocham said the Budget had linked old economy with the new, while taking full advantage of modern technology, including ATMs, SMS, e-ticketing and smart cards.

Assocham Secretary General D S Rawat said facilities provided to the economically weaker class, physically challenged and senior citizens and others were welcome steps.

Low-cost airlines, while welcoming the announcements made by Prasad, said fare cuts would not have much impact on the cost of air travel.

"The numbers are huge but it would not impact low cost air travel. We will not revise our fares as our fares are almost below first- and second-class AC," Air Deccan chairman and managing director G R Gopinath said.

Kingfisher Airlines director A K Ravi Nedungadi also said the fare cut by Railways would not have any negative impact on the airline industry.

"The minister is doing the right thing. However, we do not see any negative impact. The fare cut will certainly be helpful in increasing traffic in shorter travel but for longer distance people will not change from airline to Railways," Nedungadi added.

"The decision for increased investments on container traffic by running more trains is a welcome step. It will bring down cost to end users and help in the long run to improve railway services," Gateway Distriparks (Rail Freight) CEO Sachin Bhanushali said.

S K Nevatia, CMD of Hind Rectifiers, described the Railway Budget as 'promising' and said it would help shore up order books for those engaged in supplying equipment to the Railways.

Texmaco President Ramesh Maheshwari said: "It is truly exciting. Year after year Lalu Prasad is becoming a turnaround expert and the figures he has given are mind-boggling."