August 30th, 2006

Lalu at IIM-A

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The management institutes are trying to stay current and have been inviting an eclectic set of personalities to their campuses. After inviting the Mumbai dabbawallahs, IIM-A has done what would have been considered prepostorous a few years back by inviting Lalu Prasad Yadav for a guest lecture. The topic of his lecture will not be power grabbing in rural India but in fact, the more notable accomplishment of turning the Indian Railways around from wasteful PSU to a Rs. 15,000 crore-profit earning organization.

So what has Prasad done to the Indian Railways which his predecessors could not? The answer lies in his own down-to-earth attitude and rustic wisdom.

Prasad puts it in his inimitable style: “My mother always told me not to handle a buffalo by its tail, but always catch it by its horns. And I have used that lesson in everything in my life, including the Railways.”

When some of the Railway Board members expressed apprehensions in increasing wagon loads, a decision which alone generated Rs 7,200 crore (Rs 72 billion), Prasad said: “Wagon is the bread-earning horse of the Railways. Load it adequately. Make it run and don’t stable it.”

Prasad’s other management mantra for the Railways has been: “If you do not milk the cow fully, it falls sick,” which he is practicing while running the Railways.

The excessive use of cow metaphors notwithstanding, it is certainly an impressive achievement by the otherwise notorious politician. I do not know much about the inside details of this dramatic turnaround but I suspect it is the result of few strategic decisions like increasing wagon loads and focusing on increasing traffic instead of downsizing and increasing fares, and non-interference by politicians in the work of bureaucrats. The article does reveals that, he left the crucial decisions to his bureaucrats but unfortunately doesn’t elaborate. It would be interesting to compare performances in ministries in relationship with political control and influence.

But in his defense, I appreciate Lalu treating the organization professionally and not running amok with populist schemes that eventually bankrupt the PSU. Probably that may be because of his political survival skills and reassured reelection regardless of his decisions at the ministry.

As some people mention, they wouldn’t mind the corruption as long as they were reassured that their work would be done (the reliability factor irrespective of the means). This turnaround of Indian Railways might be partly attributable to that fact. Laloo might have handed out favors to his numerous relatives and even pushed an additional track or two in his home state but in the larger scheme of things, it didn’t register in the economic and political spectrum.

Would we be willing to live with corruption and needless antics of such politicians as long as they do a reasonable job in their ministries or respective constituencies?

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2 Responses to “Lalu at IIM-A”

  1. confused Says:

    Pat,

    I think the main reason is that Laloo ji was too busy to interfere in Railways in Bihar elections and such. Infact, this is a call for railway privatization, if little interference can achieve these results, what can a professional management do?

  2. Patrix Says:

    Confused, I agree! The trick is to give a politician something that he hardly knows anything about or cares less about. If we have given Laloo something like Rural Development then I doubt we would be talking about a ‘turnaround’. But seriously, there are other factors we might have to consider before we resort to privatization.

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