Railway turnaround a Lalu phenomenon

Balancing populism with efficiency has been his forte.

In the realms of Bihar politics, Lalu Prasad has been controversial. As far as his track record in the Railways is concerned, however, few will quibble with the fact that he is probably India's most successful Railway minister so far.

In the three years between his first and fourth budget, the Indian Railways, India's largest employer, has seen an unprecedented improvement in performance, managing the impossible by balancing populism with efficiency.

Lalu Prasad took charge of the Indian Railways in May 2004. Between then and 2007-08, the Railways surplus shot up from Rs 880 crore to Rs 11,450 crore.

In the same time-frame, he would have achieved a 42 per cent increase in freight tonnage and a 73 per cent rise in freight earnings. Not surprisingly, his earning per net tonne kilometre is expected to go up from 72 paise in 2003-04 to 91 paise next year.

Prasad's biggest contribution, of course, is in achieving efficiency gains by bringing down the share of total working expenses in the Railways' gross traffic earnings from 92.6 per cent in 2003-04 to 79.6 per cent in 2007-08.

No other railway minister has managed to achieve such a dramatic turnaround. Also, significant is the expected rise in net revenue to Rs 16,022 crore, up from Rs 4,148 crore in 2003-04.

Investments, too, grew steadily. As a percentage of gross working expenses, the Railways' investments are expected to go up from 32 per cent in 2003-04 to 57 per cent in 2007-08.

On the passenger revenue front also, Prasad has maintained robust growth - a 49 per cent rise in passenger earnings from Rs 13,460 crore to Rs 20,075 crore in this period. Earnings per passenger kilometre are also expected to go up from 25 paise to 26 paise.

Lalu's performance in passenger traffic has not been as eye-catching as in freight traffic. Perhaps the advent of low-cost airlines and populist compulsions have played a role here.