Laloo’s Rail Yatra
What did the minister do to turnaround Indian railways?
- Refused to hike fares. Shored up earnings by carrying more passengers and freight.
- Increased the load carried by a goods wagon from 81 tonnes to 90 tonnes. This gave an additional earning of Rs 7,200 crore.
- Upgraded tickets if seats were going vacant in the upper class. So, waitlisted passengers could be allotted seats.
- Maintained passenger profile so that bogies could be taken off or added to trains according to seasonal demand.
Not an advertisement for good grooming. A stained spittoon next to him. Posing for pictures in the trademark ‘ganji’ (vest). And
making absurd statements like "Floods are good for Bihar as the poor get to eat fish which swim into their houses". This is the Laloo that the media has been lapping up for long—politically shrewd but a bucolic buffoon.
And yet Laloo Yadav has surprised many by emerging as one of the top performing ministers in Prime Minister Manmohan Singh’s cabinet. He is being credited for the impossible—the turnaround of the monolithic Indian railways. From being notoriously in a "terminal debt trap", the railways under him has shown additional earnings of Rs 15,000 crore in 2005-06. In the process, it has become the second largest PSU profit-earner after ONGC. So much so, a team from IIM Ahmedabad came to study the spectacular turnaround.
So, as the Union railway minister, what has Laloo done that others before him could not? The explanation lies in his down-to-earth attitude and rustic wisdom. Laloo puts it in his inimitable style: "My mother always told me not to handle a buffalo by its tail, but always take it by its horns. And I have used that lesson in everything in my life, including the railway ministry."
Laloo says he approached the ministry like a common man with no technical expertise. "I was clear about one thing—I would not increase passenger or freight fares. It did not require rocket science to understand that the railways could increase its earnings by carrying more passengers and freight. The solution lay in increasing volumes and not the cost," he says. After taking a few faltering steps initially, Laloo was quick to realise that he needed a pointsman in the ministry. He chose a Bihar-cadre IAS officer, Sudhir Kumar, as his officer on special duty (OSD) and gave him a free hand to execute his ideas. A Delhi School of Economics alumnus, Kumar also holds a degree in business management. He has given a professional and workable shape to Laloo’s earthy ideas.
Kumar’s excitement is almost childlike when he talks about the "turnaround". But he credits all of it to his boss’ genius. Laloo, he says, not only thinks out of the box but also takes bold decisions. According to his officers, Laloo’s inherent brashness makes it easy for him to take risks. "He has not taken any step that was not known in the railways. Other ministers dithered over various policy changes which could have brought additional revenue. Quite unlike them, Laloo went ahead and took those risks, but in an extremely calculated manner. He also placed complete trust in his officers, and did not at all hesitate in delegating responsibility and powers," explains an aide.
One of Laloo’s most controversial decisions was to increase the load carried by a goods wagon from 81 metric tonnes (MT) to 90 MT. His logic: "If you do not milk the cow fully, it falls sick." He reasoned that wagons were being overloaded anyway—and hence subjected to risk of accidents—and the money being pocketed by corrupt officials. So why not load it officially? This one decision earned the railways an additional Rs 7,200 crore.
But it was not a cakewalk. The decision was vehemently opposed by the railway board member (engineering). It took a lot of convincing to make him try it out on an experimental basis for four days. However, once the wagon capacity was raised there was no going back. Similarly, Laloo’s decision to upgrade passenger tickets subject to availability of seats in the upper class was opposed by the board’s finance commissioner. She said the railways could not afford any more subsidies, which were already more than Rs 6,000 crore. She wrote a three-page note to the minister, opposing the move. It was important to take her along as Laloo wanted to announce the scheme in his budget speech.
"The minister and the OSD both tried to explain to the finance commissioner that at least all the seats were being utilised. An empty wasn’t earning any money. If lower class tickets were upgraded, then more waitlisted passengers could be accommodated, earning additional revenue. After much persuasion, she agreed to try it out on the Delhi-Mumbai Rajdhani," disclosed a railway board official. Soon after, the finance commissioner retired but her successor was sold on the idea.
Another decision which met some resistance from the board members was the doing away with the detailed examination of a train at its final destination even after a short run. It was decided that a passenger train would only be examined after every 3,500 km, and a freight train after every 4,500 km. "Lalooji saw no logic in the earlier practice. A train from Jammu to Kanyakumari was examined after 3,000 km, on completion of its journey. However, a train from Jammu to Amritsar, for example, had to be examined after 250 km," a railway official told Outlook. Each train examination takes 16 hours. Laloo’s idea was to save time and have the wagons free to run for a longer time.
Some of the measures taken by the Laloo and his officers have been simple but effective. For example, it introduced the passenger profiling system, enabling the railways to increase or decrease the number of coaches in a train according to demand. So a service to Jaipur may need less coaches during summers when traffic is low. However, these coaches can be added to a Dehradun-bound train where there is a rush in these months. Says Laloo: "This was a simple decision to take but nobody was really doing it since it required some changes in the railways computerised reservation system. All the data was available, it only had to be generated and used properly."
And all this got Laloo an unlikely admirer in IIM Ahmedabad. The premier institute recognised his turnaround of Indian railways, and made it a case study for its students. The man who was all praise for the railway minister was IIM’s Professor G. Raghuram. Ironically enough, he was one of the members of the Rakesh Mohan Committee that had looked into the restructuring of the railways. In 2001, it had pronounced the organisation to be in a terminal debt trap, with a liability of Rs 61,000 crore to the government. The panel had even predicted "fatal bankruptcy" if the railways did not privatise. Given all these, Laloo is, of course, proud that five years later he has got the pundits of doom coming for lessons.