Indian Railways (IR), which has been impacted by rising steel prices, says it seeks to contribute towards controlling inflation through a series of measures that include prioritising wheat movements for PDS buffer stock and giving freight subsidies for pulses, edible oils and salt.

Winding up the discussion in the Rajya Sabha on the Appropriation (Railways) Bill 2008, railway minister Lalu Prasad Yadav said "We will give top priority to the transport of wheat to create a buffer stock in PDS and FCI while giving subsidy on pulses, edible oils and salt."

Yadav said that said that IR was open to any suggestion to help increase the buffer stock of wheat and rice. He also said that private contractors would not be allowed to use the railways to transport wheat.

He also disclosed that the saying that the railways was itself facing the challenge of inflation as contractors were not willing to execute rail project at prevailing rates, in the wake of sharp rise in steel prices.Indian Railways is the largest consumer of steel and railway projects face cost escalation due to steel prices having risen by close to 50 per cent in the last one year.

The Rajya Sabha later returned the Bill authorising the railways to withdraw R 1,47,667.85 crore from the Consolidated Fund. 

Ruling out privatisation in core areas, he said some services like container, warehousing and modernisation of railway stations would be carried out with the help of private sector. Prasad also ruled out retrenchment of employees.

Buoyed by the turnaround which has resulted in a Rs 69,000-crore surplus, Yadav said that by the time the UPA faces the elctorate next year for a fresh mandate, the railways would generalte a surplus exceeding Rs1 lakh crore and efforts would be made to complete the pending projects. He also said that bids for the Ludhiana-Howrah freight corridor would be invited soon. 

Besides the two dedicated freight East-West (Delhi-Mumbai, Ludhiana-Howrah) dedicated freigh corridoors, feasibility studies for such projects linking south India to the west and east would also be carried out.