Status of Indian Railways (1) - Calling Lalu's Bluff!

I personally love train journeys – As a resident of Sultanpur in UP who studied in Warangal in Andhra Pradesh and Mumbai in Maharashtra and worked in Bangalore, I have been an Indian Railways’ frequent traveler. It helps that I not only love train journeys but also the food, both inside the trains and on the platforms. Moreover, having travelled by best railways in developed world (Japan, France, Germany), ordinary railways in developed world (US, UK), fast improving railways (Poland, Czech Republic, Hungary) and others (Egypt), I have some benchmarks to evaluate Laloo Yadav’s claim of Indian Railways being amongst the best.

Consider this hypothetical situation - at the Annual General Meeting of a reputed a $ 1000 Million (4000 Crores) publicly listed corporation, the CEO announced that the corporation had made a loss of $250 Million (1000 Crores) but the corporation has done immense public good through Corporate Social Responsibility (CSR) projects. CSR projects have been unprecedented, appreciated by one and all and the CEO has been felicitated by various social organizations for the company’s efforts. It is not difficult to imagine the fury among the shareholders for the company’s performance, as CSR becomes a mere footnote to the discussions. The CEO would most probably lose his job.

If the CEO of a private enterprise is fired for poor profitability in spite of great public good; should not the leader of public utility be fired for pathetic public service in spite of high profitability? CEOs act would sound preposterous to business commentators for he got his objective completely wrong. Why then has the media joined Lalu Yadav’s bandwagon in tom-tomming 68,000 Crores in reserves when trains are dirty, delays prevalent and basic comforts missing? Think of this statement, “benchmark of net surplus before Dividend makes us
better than most of the Fortune 500 companies in the world” while traveling by a train through Gangetic plains, and you would acknowledge that place of such statements in the context of reality of quality of Railways is trashcan and not B-school case studies. "Sab kah rahe hain hum ne gazab kiya hai. Karodon ka munafa har ek sham diya hai”, (Everyone is saying that I have done wonders. I have delivered millions in profits every evening), he said. The objective of a public utility or a service run by the government is to do maximum public good, while maintaining financial prudence. Would a Health Minister be rewarded for running profitable hospitals, when people are dying of disease? Or Education Minister for running profitable schools when significant part of the population is uneducated?

Traveling by ‘Passenger Trains’ (not as different from ‘Goods Trains’ but slower trains called thus to differentiate from ‘Express Trains) or most trains which ferry seasonal immigrants from Bengal and Bihar to Punjab have conditions which any western observer would consider sub-human. Stand on any platform of Varanasi Railway Station, entry point to what can potentially be India’s leading tourist destination (only city other than Jerusalem which is the leading pilgrimage for two religions – Hinduism and Buddhism) and the filth would tell you the story of all that’s wrong with Indian Railways and tourism.

It was Lalu Yadav’s Railway Budget speech which filled me with rage and prompted this blog-post. I held on awaiting a more objective analysis from the commentators – appreciation of the financial turnaround, credited both to the general economic growth and ability of the managers to leverage that for Indian Railways’ income, along criticism of abysmal service levels at which the Railways operate. This was not to come as ‘Lalu at a B-School’ is too good a TRP boost for any scope for objectivity, and Lalu himself too smart to miss out on the opportunity. It is high time we called Laloo’s bluff, and let him know that frequent visits to business schools have muddled his brain about his primary objective!