Lalu and the Indian Railways Turnaround Story

There is a lot written in the press lately about how Lalu engineered a dramatic financial turnaround and how MBA students are gathering to really understand what happened.

I think the the story is indeed impressive and worth a close study. After all, consider this:

• the Indian Railways is the world's largest employer. Almost every other statistic about the Indian Railways is equally staggering in scope.
• one of the key hurdles for the continued Indian GDP growth is infrastructure & transport
• the Indian Railways was on the verge of bankrupcy.

Just as much analysis has been done on how the then Finance Minister Manmohan Singh engineered a balance of payments turnaround in 1991, this one is also worth some examination.

I do credit Lalu for his willingness to give his chain of command some responsibility, authority, and accountability. I have tremendous faith in the IAS cadres (still!) -- and I believe that they will do the right thing if they are given a chance. I think that is what happened here. (As a side note, I think IAS officers deserve a much need revision in salaries. There is a significant income disparity between the private and public sector that is unhealthy. We need to pay better if we want to retain and attract the best. But, let's save that conversation for another day).

For now, I am impressed with what the Indian Railways has achieved! Awesome! Great job!

Let's move on to other areas that need similar attention.

Let's see. Seaports? Highways? Airports?