An insider tells the Railways’ turnaround story
To me, tracking a turnaround is a stimulating. When that turnaround is of an organisation that’s as politically charged and as huge as the Indian Railways, it becomes all the more exciting. And when all of it has details as well as the big picture in a small 207-page book, it becomes compulsive reading.
On Friday, as Lalu Prasad presented his last Railway Budget (interim) as part of the current UPA administration, his speech took me on a journey that’s five years old — I’ve been following Lalu and his Railways since he took charge in 2004 as Minister of Railways.
And yet, he remains an enigma. A simple rustic as well as a management guru; a failed leader in Bihar as well as a successful one in the Railways. Lalu is a book waiting to happen — just that it needs to be an honest one. In the public policy space, I find English-speaking intellectuals still find it difficult to come to terms with the fact that an English-inarticulate person like Lalu can turn management theory on its head. And despite a performance that would leave many management stars behind, this snobbery just refuses to end.
In fact, as far back as 1991, when I read the Rakesh Mohan Committee report ( ‘The Indian Railways Report 2001: Policy Imperatives for Reinvention and Growth’) on the Indian Railways, the organisation has been chugging along in my mind. Then, the dominant thought was to reform an organisation that was a hair’s breadth away from bankruptcy. Among Mohan’s formulae for solving the problem were to make the organisation commercially viable by ending subsidies on the passenger fares and reducing freight rates.
None of which appealed to Lalu, who had his own brand of earthly common sense to fix the problem. Lalu has turned the Railways around, completing his five-year term with a Rs 90,000 crore profit, which he announced in his speech on Friday. Like or not, this is a remarkable feat, one that we’ve never seen in Independent India.
In Lalu’s turnaround-team was a former teacher and present administrator Sudhir Kumar (podcast here), who grappled with the nitty-gritty of freight rates and passenger fares and gave body to Lalu’s ideas. His formula: reduce the per unit cost of transportation and pocket the surplus. This was done mindfully and having had intense interactions with him — some questioning, some hard interrogations — what I can vouch for is honesty, clarity and a respect for argument in him.
Much of this turnaround has been captured in print, and I plead guilty to having written many columns myself. But Bankruptcy to Billions: How the Indian Railways Transformed written by Sudhir and Shagun Mehrotra of Columbia, goes deeper into the turnaround, and gives us new information as well as new insights into this turnaround.
The book has the advantage of an insider view along with the rigour of a scholar, a combo that dissects the Railways’ journey back from the brink of disaster. Most of what’s in the book will be known to Railway trackers, but there are two chapters where I found freshness.
In The Political Economy of Reforms, I found great clarity in the way politics and profits can live happily ever after. Both the politician and the professional bureaucrats who run the Railways need to understand one another — not always is a politician a meddler, nor the bureaucrat a paper chasing wall of inertia. In this mutual mistrust, the impression outsiders carry is that the politician is a joker and the bureaucrat a babu. Neither likes the term.
But remember, it needs an organisation like the Railways, where the professional core is a disciplined army of 1.4 million people, for the politician and the bureaucrat to work together in harmony. There is no doubt that this model, or its variant, needs to be copy-pasted on areas like public health and public education, but I wonder whether they have the one enabling trait — discipline.
The second chapter I found new ideas in is the last one, Outcomes, Sustainability and Replication, where the authors display deep insights, bringing into the public arena the fact that the real problems and challenges before the Railways are not even part of any intellectual debate. According to the authors, the current debate focuses on creative accounting, safety and sustainability — of which they provide answers to.
The real problems, according to them, is “attracting and retaining talented staff, creating a culture of cross-functional collaboration, increasing accountability across the hierarchy of the organisation, and spurring innovation”. With competition from the private sector for talent rising, it is getting difficult to retain talented employees in the Railways.
“Almost 30-40 per cent of IIT in the mid-1970s is sitting here in the Railways,” Sudhir told me after the Railway budget on Friday. “Today, Railways figures nowhere in IITs. If that talent is not coming in, who will run the Railways?” He is disappointed that these new threats are not even being discussed.
For anyone interested in knowing about how the Railways turned around as well as ideas on how to keep the profit engine chugging along, this book is a must. Besides, for any student of political economy this book is a must as it shatters the assumptions of constraints. “Only 20 per cent of the total capital investments of the Railways have political implications,” the authors say. So what prevents the balance 80 per cent from being ‘efficient’?
Nuggets of information backed by actions that have shown the turnaround make this book an essential part of anyone working in the space of infrastructure and policy but equally in the private sector, where at times, the bureaucratic constraints are not very different from the Railways’. The book should hit the stands shortly — do read it.
But having said that, I must also point out that as a book this would be only the first among many on the Railways’ turnaround. I found academic rigour missing. Sudhir’s passion is overpowering and even though the authors have written it in third person, there is a “look, we’ve done this” underlying throughout the book. And having seen it, I agree and resonate with their enthusiasm. But I also wait for a better book, one that looks at the strategies, numbers and change along with stories about the people who did it.