LALU PRASAD on Monday used the tools of easy language and rustic logic to explain to IIM students here the success of the Indian Railways. And after his three-hour-long lecture, the students of the country's top business school said they were impressed with the railways minister and took a few important business tips from him.
The turnaround of the railways —from a loss-making unit facing bankruptcy to a profit-making house within a couple of years was the subject of a case study prepared by senior IIM-Ahmedabad professor G. Raghuram. The study was recently included in the curriculum for the institute's post-graduate programme for executives (PGPX) and Lalu, credited with the turnaround, had been invited to deliver a lecture.
Speaking in Hindi before a gathering of about 100 MBA and PGPX students and faculty members, Lalu said he borrowed a few ideas from rural India — that perhaps form the foundation of all modern-day managerial concepts. One of the ideas: a cow will fall sick if you do not milk her fully. He likened the railways to a Jersey cow — the more you milk her, the more she yields.
He said the turnaround "was brought about by taking practical steps" and not by increasing passenger fares. The strategy included cost-cutting measures and boosting passenger and freight traffic.
The railways’ figures say passenger traffic increased from 5,818 million in 2005-06 to 6,400 million in 2006-07. Freight load is expected to touch 738 million tonnes in 2006-07 after registering 18 per cent growth the previous year.
After the lecture, Lalu told reporters that the railways had earned Rs 13,500 crore by March this year and the figure was expected to touch the Rs 20,000-crore mark next year. He promised to sustain the turnaround: "We will sustain and earn even more in the days to come."
Students described Lalu's lecture as educative. "Although he answered many questions in a lighter vein, it seemed that he knew what he was talking about," said Rahul Raushan, who attended the session. Another student said that the minister's "image of a joker" was not correct.
At the press briefing, Lalu himself took a dig at those who make fun of him. He said he proved wrong all those who had predicted the doom of the railways after he took charge. In response to increased interest in the railways among management students, he announced the institution of a railways chair at IIM-Ahmedabad for the study of infrastructure.
Delivering a public lecture on the IIM campus later, he said a panel report in 2001 about the railways being in a terminal debt trap had come to him as a "whiplash" and he was determined to turn it around. The Rakesh Mohan committee had predicted that the railways would hit bankruptcy with Rs 61,000 crore losses by 2015.
"The very fact that the hi-fi family of management students have invited the 'vidushak' (jester) to their campus speaks volumes about the railways's success story," he said.