Laloo and the Indian Railways turnaround story
I have managed to gather a few points on a topic which I have always wanted to look into for quite some time now.
Laloo and the turnaround story of the India Railways: From almost being declared as heading towards fatal bankruptcy to a profit of 15,000 crores and today being looked at as the second most revenue generating PSU after the ONGC.
Thanks to the 19th June 2006 edition of Outlook, I have managed to assimialte the following key points:
Action # 1: The goods wagons were earlier carrying 81 metric tonnes (MT) of goods, this was increased to 91 MT.
Rationale: The wagons officially were meant to carry 81 MT but unoffically they were carrying much more, some corrupt raliway officials were making money in the process, so why not make overloading offical?
Result: This move alone resulted in an additional inflow of Rs 7,200 crores
Point to ponder: When the maximum limit was set to 81 MT earlier, this must have been done considering safety standards, pushing it to 91 MT would lead to an increased probability of accidents. The engineering group of raiways heavily opposed the move. But, Laloo's reaction "If you do not milk a cow to the fullest, it falls sick"
Action # 2: Upgrade passengers to upper class if berths are available
Rationale : The train would run full, and people who are waitlised in the lower class would be assured of a berth.
Result: Not sure of the aditional revenue inflow that happened due to this move.
Action # 3 : Do away with detailed examination of trains which have travelled short distances
Rationale: A detailed examination of the train is done after it completes a journey immaterial of the duration of the journey. A train which has run from Jammu to Kanyakumari covering a distance of 3000 kms would undergo the same 16 hours examination which a train covering a distance of 250 kms from Jammu to Amritsar would undergo. Laloo did away with the examination of the trains running on short distance and instead let the bogies run for a longer time.
Action # 4: Maintain passenger profiles so that bogies could be taken off and be added to needed trains.
Rationale: A train going towards Jaipur in summer would not be running full whereas a train running towards Dehradun would be needing extra bogies. So, move the un-needed bogies from Jaipur train and add it to the Dehradun one.
Points to ponder: Adding extra bogies to a train, would it not again lead to the same issue as that in # 1 ?
The actions which Laloo has taken were quite simple, all the data was present with the railways, but no one in the past had ever attempted extrapolating the data and make such good use of it.
The turnaround story has found admirers in IIM Ahmedabad and especially in Professor G. Raghuram who as part of the Rakesh Mohan committee in 2001 had declared the Indian Railways as an organization in a terminal debt trap and heading towards "fatal bankruptcy" if it did not opt for privatization.
Laloo and the turnaround story of the India Railways: From almost being declared as heading towards fatal bankruptcy to a profit of 15,000 crores and today being looked at as the second most revenue generating PSU after the ONGC.
Thanks to the 19th June 2006 edition of Outlook, I have managed to assimialte the following key points:
Action # 1: The goods wagons were earlier carrying 81 metric tonnes (MT) of goods, this was increased to 91 MT.
Rationale: The wagons officially were meant to carry 81 MT but unoffically they were carrying much more, some corrupt raliway officials were making money in the process, so why not make overloading offical?
Result: This move alone resulted in an additional inflow of Rs 7,200 crores
Point to ponder: When the maximum limit was set to 81 MT earlier, this must have been done considering safety standards, pushing it to 91 MT would lead to an increased probability of accidents. The engineering group of raiways heavily opposed the move. But, Laloo's reaction "If you do not milk a cow to the fullest, it falls sick"
Action # 2: Upgrade passengers to upper class if berths are available
Rationale : The train would run full, and people who are waitlised in the lower class would be assured of a berth.
Result: Not sure of the aditional revenue inflow that happened due to this move.
Action # 3 : Do away with detailed examination of trains which have travelled short distances
Rationale: A detailed examination of the train is done after it completes a journey immaterial of the duration of the journey. A train which has run from Jammu to Kanyakumari covering a distance of 3000 kms would undergo the same 16 hours examination which a train covering a distance of 250 kms from Jammu to Amritsar would undergo. Laloo did away with the examination of the trains running on short distance and instead let the bogies run for a longer time.
Action # 4: Maintain passenger profiles so that bogies could be taken off and be added to needed trains.
Rationale: A train going towards Jaipur in summer would not be running full whereas a train running towards Dehradun would be needing extra bogies. So, move the un-needed bogies from Jaipur train and add it to the Dehradun one.
Points to ponder: Adding extra bogies to a train, would it not again lead to the same issue as that in # 1 ?
The actions which Laloo has taken were quite simple, all the data was present with the railways, but no one in the past had ever attempted extrapolating the data and make such good use of it.
The turnaround story has found admirers in IIM Ahmedabad and especially in Professor G. Raghuram who as part of the Rakesh Mohan committee in 2001 had declared the Indian Railways as an organization in a terminal debt trap and heading towards "fatal bankruptcy" if it did not opt for privatization.
posted by Arjun Narayan at
8:34 AM
2 Comments:
good work done! thank you so much for the info!
very good compilation of relevant points! thanks
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