the rupee train-rohit raina

7/27/2019 The Rupee Train-rohit Raina

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THE RUPEE TRAIN

Source: ZERO; Destination: BILLIONS

The question arises why management students should read an article about

Indian Railways. What’s so good in reading about it and most important, reading

about a man who has ruled and ruined Bihar, a corrupt individual involved in theFodder scam and a politician facing a lot of corruption charges. This article

comprises of that particular answer as what were the reasons that his tenure as

Indian Railway Minister made people to rethink about him from a Village Bumpkin,

an ILL-Literate Politician to one of the best Railway Minister India will ever have. Yes

I am talking about none other than Mr. Lalu Prasad Yadav and his iconic turnaround

of Indian Railways from bankruptcy to profit making billion dollar industry.

How did the man who bankrupted Bihar turn around railway finances to deliver acash surplus of Rs 25,000 crores in 2008 from bankruptcy under Mamata Bannerjeein 2001? The Expert-Group report submitted in July 2001 stated:

“Today Indian Railway is on the verge of a financial crisis... To put it bluntly, the‘business as usual low growth’ will rapidly drive IR to fatal bankruptcy, and insixteen years Government of India will be saddled with an additional financialliability of over Rs 61,000 crores… On a pure operating level, IR is in a terminal debt trap.”

So how can a man change the finances and deliver a cash surplus. As amanagement student I dig up deep in order to know what iconic reforms Mr. Lalumade to achieve this feat. Lalu had to take a strong makeover decision for the IR. Itwas a people’s wagon and he had to make sure whatever the decisions are it shouldnot create ripples in people’s mind or feelings which is, “no hike in passenger fares,no retrenchment or privatization.” The reformers realized that every decision had tomeet the market and societal value tests. Cost-cutting was no option. Jack Welsh’sphilosophy – fix, sell or close down – might work in GE but not in a politically-sensitive department employing 1.4 million people. Most items of cost whethersalaries or the price of diesel were beyond the control of the Railways.

The operationalisation of the various strategies over the past two years dependedsignificantly on the leadership style of Mr. Lalu Prasad. It was a common sense



US, telling them how he scripted the success story of the country's loss-makingRailways.

ROHIT RAINA

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the rupee train-rohit raina

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