Living in the love of common people

The second largest rail system under single management in the world, Indian Railways has a route length of more than 62,000 kilometres.

In 1998 the Rakesh Mohan Committee was formed to evaluate and restructure the financial state of Indian Railways. A constant debt burden for the central government, Indian Railways had, at that time, been ailing for years, posting repeated losses. In addition to the immense operating costs, the service also had just under a million pensioners, spending approximately 14 per cent of its operational cost on pension payouts.

The point of the Rakesh Mohan Commission was to evaluate the operation and devise a viable route to financial health for the country's transportation lifeline.

In 2001, the committee chaired by Rakesh Mohan, chief economic advisor to the Prime Minister, returned with its observations, noting that unless Indian Railways was completely overhauled, it faced a death sentence and unavoidable bankruptcy.

Among its many proposals was the privatisation of almost every conceivable part of the system, from railways schools and hospitals to production units and maintenance workshops. In order to cut expenses, the committee suggested the recall of all privileges extended as concessions or social services to seasonal ticket-holders, senior citizens, those physically handicapped, students, children, artists, freedom fighters, and others.

The commission's overall recommendations painted more than a grim future for the railways and its assertion that non-adherence to its recommendations would result in fatal debt and bankruptcy left all of Rail Bhavan (Indian Railways headquarters) reeling.

It was in the wake of this sentiment that Lalu Prasad Yadav, India's most loved and reviled politician, was handed the railways portfolio.

A common feature in satirical columns and no stranger to ridicule from the press as well as his peers, Lalu — as he is fondly known across the nation — was determined to shake off the stench of a fodder scam and a stint in prison. Under his tutelage of just three years, he's managed to turn Indian Railways around and in the process left opponents gagging on their criticism of him and running away from the press.

In his 2006-07 budget (Tenth Five Year Plan) speech to the Lok Sabha, Lalu was the picture of a proud man who'd climbed an insurmountable mountain: "I take pride in informing this House that in the first nine months of the year 2005-06, the railways' output has been record breaking. The growth in freight loading was 10 per cent and in freight revenues it was over 18 per cent. Based on the trends up to now, the freight-loading target is being increased from 635,000 kilograms to 668,000 kilograms and the goods revenues target from Rs334.8 billion (about Dh3.05 billion) to Rs364.9 billion (about Dh3.32 billion). The Tenth Plan's targets of 624 metric tonnes loading and 396 billion tonne kilometres have been surpassed one year in advance. I not only hope but firmly believe that we will surpass the Tenth Five Year Plan's incremental target of 63 billion tonne kilometres for freight business by over 200 per cent."

Wide network

But it wasn't just the freight-loading or commercial rail aspect that had improved. At the very outset, Lalu sought to bring Indian Railways back to its roots — the people. The second largest rail system under single management in the world, Indian Railways has a route length of more than 62,000 kilometres. The 8,049 passenger trains and 5,500 freight trains carry 13.6 million people and 1.2 million tonnes of goods every day.

So vast is the network, reaching the farthest outposts of the most rural Indian states that the number of staff required to make this complex system work is about 1.4 million.

The creaking system, which ran its first train from Bori Bunder to Thane on April 16, 1853, had been all but written off by ministers and analysts, so when Lalu stood in front of a packed Parliament to present the Railways Budget for fiscal year 2007-08, there was no mouth left closed.

His announcement of success was incontrovertible: "The railways are poised to create history by generating a cash surplus before dividend of Rs200 billion (about Dh1.82 billion) as against Rs14,7 billion (about Dh1.34 billion) in the previous year. This is the same railways that defaulted on payment of dividend and whose fund balances dipped to Rs3.59 billion (about Dh327.34 million) just six years ago."

The Rakesh Mohan Commission's "white elephant" was no longer the threat the Federal government had perceived five years prior. Instead, it was a source of pride, with immense potential and impetus.

Lalu's ingenious treatment of the grassroots transport network instantly made him the subject of respect and adulation throughout the hallowed halls of the Rail Bhavan and management institutes from round the world flocked to him to catalogue his work with the railways. The Indian Institute of Management, churning out India's prime brain drain candidates, now has the Indian Railways case study in its major coursework and Lalu has addressed students from prestigious business schools such as Harvard and Wharton.

The shift has been so great that Arun Topno, a Jharkhandi working in Dubai commented, "We don't have to travel like cattle anymore just because we're poor. Everyone would laugh at him when he was Chief Minister of Bihar; I did too, but now he's carved a new identity for himself. Travelling by train from Delhi to Ranchi used to be my worst nightmare, but when I took the train in May, it was safe, clean and punctual. We even have air-conditioning in the lower classes now."
Topno travelled on what has been termed the garib rath (the poor man's chariot) – an entirely air-conditioned inter-city and cross-country train service.

Making the Railways a viable enterprise and especially one that would eclipse Reliance Industries by almost doubling its profits meant having to start at the very beginning.

Why did people not want to travel by train? Air travel was cheaper than ever before and trains were downright uncomfortable. The resulting changes under Lalu have been astounding. He decided to fight the airlines on their turf, turning railway carriages into replicas of aircraft interiors, complete with individual LCDs and comfortable, reclining chairs.

Online reservations

Meal services have become more sophisticated and services across the board have been elevated to provide a more pleasurable travelling experience.

Instead of treating the enterprise like a traditional, federal division, Lalu changed tack, approaching it like a commercial enterprise that needed the cobwebs cleaned off. Railway concourses now sport golden arches and take-away pizzerias. Coffeeshops a la Barista and Café Coffee Day are staple, among others.

The evolution toward online reservations has finally become a reality under Lalu's instruction. Cleaning up and organising the website and online services to make the reservations process seamless has made rail travel accessible and much easier to coordinate than ever before.

Aside from improving the overall quality, effectiveness and financial situation of the railways, Lalu has found ways to ensure that the system brings about a positive ripple effect in the associated economy. He banned plastic cups at railway stations and opting for earthen cups instead, claiming it would help create jobs in rural India.

He also decided to adopt khadi (Indian handspun or hand-woven cloth) for bedlinen provided to passengers on the train and serve buttermilk to reduce wastage and pollution and to increase jobs in rural areas.

Next generation

But more than all of this, the biggest shift has been in the ministry's approach to the unused land that it owns around its stations.

As international retailers and hypermarkets enter the country and look to set up shop, Lalu is set to lease Indian Railways' land in exchange for lucrative deals that will hopefully finance the building of new tracks and stations. In conjunction with that, new trains and systems will be bought to modernise the railways and finally bring it into the next generation.

The effective utilisation of under-explored assets — that has been Lalu's secret weapon. Yet it's hardly a revelation — it's the stuff of old wives' tales and Aesop's fables. Then again, sometimes you have to go back to basics to get ahead.

If there is a lesson to be learned from the rags-to-riches story of Indian Railways, it is this: never under-estimate the man who looks stupid; he is never afraid to look stupid, he is never really stupid and he is always likely to make you eat your words.