Lalu146;s in business

That the turnaround in Indian Railways is real and has been crafted by Lalu Prasad is now beyond doubt. His third budget shows this by the numbers 8212; revenues, freight, passengers and, most of all, profits. At Rs 14,293 crore, the Railways aims to be India8217;s biggest profit maker in 2007. And, crucially, unlike most earlier budgets, Lalu has lowered AC I and AC II fares and not raised freight rates. So, what8217;s this turnaround all about? In English, it8217;s about volumes. In economics, it8217;s about unit costs. In business, it8217;s about a productivity jump. In marketing, it8217;s about customer focus. In politics, it8217;s about keeping and nurturing constituencies.
Using common sense dictums like 8220;wagon is the bread earning horse of the Railways, load it adequately8221;, Lalu8217;s skill lies in not only being able to diagnose the disease, but offering strong medicine like increasing axle load by 4 to 8 tonnes and reducing turnaround time from seven days to five in the short term, and vaccines like investing in the Rs 22,000 crore freight corridor and capacity expansions of coach and wheel factories in the long term. All the news on Bihar8217;s non-development, all the scary stats on a state Lalu ruled de jure and de facto, all his determined brand building as a rustic, ready with one-liners politician, led most observers and most of the media to miss one fact: Lalu was changing as a minister and the railways was changing with him. So, for the first time the budget recognises competition from airlines. Lower AC fares, upgrade options and frequent traveller schemes are the Railways8217; answer to low-cost airlines.
These should be seen alongside efforts to provide better services 8212; shortening the once infamous long queues at booking counters, offering better passenger amenities, modern facilities, safety. Competition from roads had led the railways to restructure its freight rates last year. When goods are carried at cheaper rates, when passengers travel better at lower fares it means reforms help the aam admi. How appropriate that Lalu is carrying the message.