With assembly polls coming up in several states this year and parliamentary elections slated for 2009, the UPA government's railway budget is expected to be "extra people friendly".
There may be no hike in general category fares and a slew of amenities are in the pipeline for passengers.
The special emphasis would be on different underprivileged groups and on backward regions.
Railway Minister Lalu Prasad met Prime Minister Manmohan Singh on Tuesday to get his seal for the proposals before finalising the budget. He is said to be keen on maintaining his record of not having introduced any fare hike in his tenure in the ministry.
There is a possibility of a marginal fare cut in the general category, akin to the token reduction of Re 1 in the daily fares for non-suburban second-class trains and non-superfast mail and express trains that was introduced in the last rail budget, according to sources in the ministry.
Special attention has been given to the needs of farmers, workers and students while preparing the budget. Prasad is likely to announce specific schemes for them when he presents the budget on February 26.
There would be some incentives for porters, who form a large part of the rail work force and have been demanding Class IV status, sources said.
Regarding freight, the railways' main money spinner, the process of rationalisation in structure would continue and some concessions for select categories is expected.
The railways has been trying to wean away the freight business from road transporters.
Lalu has said his focus will be on increasing the number of general coaches and the comfort level of the passengers.
A provision will be made for setting up modern facilities at a large number of model stations that are planned to be developed during the year, besides the New Delhi station that is to be developed into a world class station before the 2010 Asian Games in the Capital.
Sources said attention will be given to strengthen services in backward regions, particularly the Northeast. Several lines are to be sanctioned in this region, in the vicinity of which China has extended its rail network.