Indian Railways Case Study

Indian Railways Case Study: (Laloo's Role, Privatization and Other Issues)

Profitability:

IR has a HUGE cost structure that could be trimmed. IR, in addition to the infrastructure if provides the employees, actually has almost a parallel economy running! They even have a complete phone network exclusively for IR. These are obviously completely free and extend across the country. This is just a small example BTW, of the costs... Privatization would see HUGE changes, but one can never really say about the complete effects without a complete study of the structure of IR as a whole.

Lalu:

For this, you need to look at what the organizational hierarchy of Railways is. Look at the Railway Board for example. Just what role does the Railways Minister play in the Board? Frankly? A very, very miniscule role...restricted mainly to just authorizing decisions made by the administrators (on the Board).

So, in terms of whether Lalu has been good, my opinion is that it really has made no difference who the Minister is. It's just that he has been very, very lucky with the people below him in the Civil Service among certain other environmental factors.

Modernization:

People are speaking of high-speed trains etc. But here, I must start by asking what the priorities are for IR!!! Is it purely profits? I don't think so. Unlike flight travel, IR's stated objectives as well as their REQUIRED objectives should include reach and accessible means of transport.

So, the primary focus needs to be on efficiency. It's all very well to have the reach (which IR now does have) and also to speak of high-tech trains, but what about the efficiency and the ground needs to run such a system? What IR really needs to do first up is focus on improving the infrastructure (including the manpower) and then on the efficiency of their operations. The adherence to schedules is a prime focus area for me as also the entire station management and safety standards!!!

Should Lalu be credited with Improvement in Railways?

Upto an extent, yes.. Because, he had the conviction to give power in the hands of his Babus. Then probably he took vivid interest in the department rather than just concentrating on how much money he can make from it.

People tend to discredit him, because of his earlier involvement in a lot of scams. But if we look at it from a detached perspective, he did play a role.

All said and done, normally there are people who do not come in the limelight who are real heroes and in this case also, they are the real turnaround heroes. Still, some amount of praise can be reserved for Laloo for having belief in them.

I might not consider him a great leader, but he has it in him to rally the masses as well as taking good decisions because the man appear to be very intelligent and shrewd despite missing sophistication.

Is an operating ratio of 0.78 good enough or more improvement is required in this area.?

In large organizations, an operating ratio of .78 is considered excellent. To put things in perspective, even Reliance operates at higher ratio.

However the need of the hour is to change the emphasis from profit generation to infrastructure investment to improve the lots.

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History of Indian Railway

History of Indian Railway began on 22 Dec 1851 when a goods train started. First passenger train started on 16 Apr 1953 between Mumbai and Thane. Thus for more than

150 years Indian Railway is serving us nicely. Since then Indian Railway had grown slowly and steadily. In 1952 Zonal system had been introduced in Railway with total Six Zones. With the development, it has reached to total 17 zones.

Current Status

In 17 zones, Indian railway is having more than 8700 passenger trains. It is covering all states except Sikkim. Indian Railway provides many suburban railway services in major cities like Mumbai, Chennai, Kolkata, Delhi & Hyderabad. Railway is one of the most preferred transportation medium. A normal passenger train consists of eighteen coaches where 9 coaches are sleeper class; 3-5 are air-conditioned coaches. A normal passenger sleeper coach accommodates 60 to 72 passengers. Indian Railways makes 70% of its revenues and most of its profits