Lalu Prasad Yadav to lecture at IIM

On cows, bulls and corporate turnarounds

Much criticised on this blog for his neglect of railway safety, Lalu Prasad Yadav has nevertheless presided over one of the few instances in recent memory when India’s gargantuan state-owned railway system has turned a profit. The feat under his belt and with prime ministerial ambitions not inconcievable, Lalu Prasad is, bizarrely, attempting to improve his image. For instance, to that of a—hold your breath—“management guru”.

(Lalu Prasad Yadav’s) secret lies in the fact that he did not convert the ministry into a Bihar Bhawan but left the crucial decision to his bureaucrats. He is achieving his targets not by increasing fares or downsizing, but by increasing traffic.

Lalu’s next stop? Apparently, Harvard.

23 thoughts on “Lalu Prasad Yadav to lecture at IIM”

  1. “The feat under his belt..”

    Of course The Acorn is saying the above in jest, isn’t it?

    Big enterprises like the Railways making losses for as long as they have been don’t turn profitable overnight. Lalu Yadav is hogging the credit for the groundwork done by his predecessor, Nitish Kumar, just as the UPA government is hogging the credit for a 3rd year in row of 8+ growth, which again is on account of the momentum generated by the previous government.

    The party will end sooner than later unless policy-driven approach to growth (liberalization, privatization, downsizing of government etc), put a halt to by UPA, is revived. Of course, rains gods need to cooperate too.

  2. Until Laloo lost Bihar, he didn’t have time for anything else – the same media singing Laloo’s praise now wrote about how the railway budget was being done by secretaries directly working with Manmohan singh. Image buildup, allright.

  3. RR: The party will end sooner than later unless policy-driven approach to growth.
    Disagree. Policy is one aspect of the growth. By giving these silly successive governments all the credit/blame for Indian growth we forget the real engine – the people. We are the same people who have managed to enterprise and thrive in the far more suffocating Nehruvian socialist mess. Policy can aid or hinder that growth. Only really terrible policy can derail it. In the words of an India-watcher: India’s growth is not on autopilot. But it will take a really terrible pilot to crash this plane.

  4. It’s a great business turn around story of our times – my favorite biz topic. Nitish Kumar may have laid the groundwork but Lalu has sustained it and one can see remarkable improvement in Bharat Rail just few years removed. I am most surprised that IIM is embracing him, instead of being snobbish about it – may be the interest of other top European biz schools pushed it along the way. I think it’s great.

    Libertarian, policy is everything. The only difference between 4-5% and 8-9% growth is policy. Suddenly Japanese and the Europeans did not become lazy or stupid to go from 6-7% growth in 60s & 70s to negative or zero growth in the 90s. Just imagine how much faster the current Indian growth would be (and how much fast poverty would be reduced) if UPA is actually making sound policy instead of wasting years sitting around doing little.

  5. Chandra, I think libertarian wanted to make the point that though policies are important (you’re right, the people are the same between 1991 and 2006; only the policies are different) it is the people who should get the credit and not the policy-makers themselves because most of the “policy-making” has been a dismantling of policy i.e. policy-unmaking.

    I can imprison a painter and then set him free; I as his prisoner and subsequent releaser, do not deserve much credit in his subsequent creations and paintings. If anything I should be punished upon seeing the results of setting the painter free.

  6. Chandra: Agree on giving Laloo credit. The man’s very smart – too bad he has was using those smarts in Bihar’s cesspool all these years. Heck, if he can show the same focus, I see nothing wrong with him as PM.

    7×6: thanks for explaining my point. You did it far better than I. I marvel at the facile Indian mind. This is not just feel-good, India shining stuff. We own a small business (2-outlet bakery/cafe) – which allows me to interact with a bunch of small (mostly Indian) biz owners. These folks are hungry, smart and focussed. The Indian grocery stores operate (quite successfully) with low gross margins that would send chills down Costco’s spine. And much like Laloo, they got their education in the School of Hard Knocks – complete sons/daughters of the soil who’d rather speak in Hindi/Punjabi/Gujarati/Tamil/Malayalee than in English. They may not be able to put a balance sheet together, but they can lecture authoritatively on cash flow and risk-taking. They’re admired, envied and feared by other communities. Makes me proud to call myself Indian.

  7. well me thinks that laloo is being rewarded for his incompetence,his kullad and wheeler comments do show precisely that he has also benifitted from nitish kumars successes- the team of babus siting at rail bhavan must be the true people behind the turnaround and should be invited to iims.
    Their plan was to double freight carriage on rail lines and thanks to the fuel prices it became a superhit for the rails
    on the other hand he has introduced a lot of trains from /to bihar without assesing funding and viability NOT given anything to mumbai rail or done anything abt the rail safety the new coach induction has been super delayed

    ts a myth that he has not interferred, he has staffed the railways with lots of yadhavs and biharis striking unrest in mumbai, most yadhav milkmen have got benifits nyways most of them hardly pay for the ticket in bihar nyways..

  8. It is very good to see the entreprenerial spirit uncaged in India. If only Nehru and his cohorts had understood that Indians are capitalistic at heart. There is no better example is that of the corner grocer who knows the cost of his goods by heart, can locate any item in his store, and can tally what you owe him without the aid of a calculator. What that grocer always needed what more competition so that the consumer was not fleeced. What we got from the government was Super Bazaar. I wonder if those socialist boondoggles still exist.

    Policy is everything and if the underlying culture is entrepreneurial, you will see miracles. Government should limit iself to doing things where private sector has no role: law and order, defence, preserving monuments (heritage), consumer protection, etc. It should leave running inter-city buses to the private sector.

  9. Why all the crowing about LPY folks??? It is his job to run the railways and make sure they are run efficiently, profitably etc. He is just doing his job. What is the big deal!!!

  10. UJ,
    It was also LPY’s job to run Bihar efficiently when he ruled for 15 years but look what he did to it. Just imagine what Bihar would have been if he had left it to his babus. I guess his party would have been still ruling Bihar.

    Is policy everything? The govt didnt even know what the software industry was doing till y2k became news. Only after they realised what a golden goose it was did they start caring about IT.

  11. btw, i hope IIMs allow the media to telecast LYP taking classes. It would be a treat to watch him teach in his Bihari rustic style.

  12. RS: After we’re done with the IIM live telecasts, let’s have one of LPY as PM taking on Mush soon after one of the many massacres in our cities. No couching the message in euphemisms from an Oxford PhD. We’ll get the Bihari equivalent of Bush’s plainspeak. That kind of speech would be pay-per-view material!

  13. True Umrao Jaan. LPY has done his job, and has done it well enough going by the News paper reports (I’ve not read the original report) and LPY’s claims. If LPY is just doing his job, then so did the previous ministers who’d occupied his seat. Yet, they didn’t come up with this kind of “feat”. Shouldn’t they too lecture us -entire country, not only IIM- about the reason for the failure to do their job?

  14. 7×6, When I say policy is everything it could be good- or bad-policy including not having one at all, such as for a nascent IT industry (but as it grows the industry needs lot of clear headed direction, as wireless telephony eventually got). What you say is true about the painter. Because in a democracy, usually, a bad policy maker has an easier hand than good one, I think we should always recognize the good ones when people talents are unleashed.

    Umrao Jaan, don’t dismiss Lalu so easily. Sure he destroyed Bihar (much beyound where it was prior) and he could have taken railways the same path and still claim he was doing his job. Babus can always propose good ideas but as a good minister (and good manager) he has to let them have their way. While we complain about incompetent ministers and babus, we should celebrate competent ones.

  15. Does anybody have the stats for Railways performance from 2000 up? What does graph show? A steady upward incline or a sudden spurt post-2004?

    It defies commonsense to believe that a man who successfully took Bihar to the dark ages can transform overnight into enterpreneurial messiah unleashing the potential of the Indian Railways. Soon after he took over as Railways minister, he commissioned a special train to travel in style — party workers and footsoldiers in tow — to Patna: ostensibly to inspect the condition of the railways; in reality to show off his new status. Is that what a man concerned about the Railways’ losses would do? Face it: Lalu Yadav is helpless in the face of Railways’ turn-around. He’ll work on getting a grip on it yet, but as of now he has bitten dust.

    If you guys insist that we all ought to be grateful to Mr Yadav for not screwing up the Railways yet, I concede you have a point. That indeed is a show of monumental restraint from a man who, like the old joke goes, is capable of turning Japan into another Bihar.

  16. Here’s some googling.

    Net revenue for Indian Railways:

    1990-91: Rs 1113 crore
    2000-01: 1071
    2001-02: 2337
    2002-03: 3830
    2003-04: 4478
    2004-05: 5273
    2005-06: 5914

    No figures are available for the period between ’91 and 2000. If the numbers for these two years are any indication, the 90’s are a decade of zero growth in revenues. Since then, five-fold increase by 2006. And in fact, y-o-y growth is the *least* in 2005-2006, the FY that Lalu is fully responsible for.

  17. LPY does NOT deserve to be feted for NOT screwing things up. One reason Railways prospered under his stewardship is probably that he does not care about it the way he does for Bihar. The way I see it, MS has to keep him in good humour till LPY can plot his way back to the CM gaddi in Bihar.

    As far as giving management lessons to IIM students, it is just an Arjun Singh directive that 49.5% of all professors in central education institutions have to be from the OBC/BC category :)))

  18. Railways is too Big a Orgranization to be turned around by One person or a couple of good Policies.

    What turned around Railways was two fold

    1. With Increase in Fuel Prices, the previously higher charges of Railways (when compared to Road / Sea) became much comparitively cheaper due to no change in fares.

    2. One of the problems with Railways is that they dont have the wagons (Qty wise) to be able to service everyone. They overcame that by allowing Overloading.

    While on the short term Overloading may contribute great to the Revenue of the railways, its a Long Term risk enhancement since just like Roads become weaker on movement of overloaded vehicles, so does the railway Infrastructure which can lead to maybe even Disaster (Collapse of Bridge, etc).

    One of the other reason for Railways to prosper under Laloo is that most persons assumed a huge Underperformance and due to above factors he actually performed (ie, his Ministry) and hence the suprise.

    On a Long Term scale, Railways is in real deep sh*t since its not investing in Infrastructure and just spending the income on maintanence. There would come a day when the crumbling infrastructure just cant support even day to day operations and that day, it would be the Death day for the Great Indian Railways.


  19. Good anlysis, Prashant! Hope LPYand bureaucrats are reading this blog and the comments and do the necessary infrastructure improvements. 🙂

  20. If additional loading of 4 to 8 tonnes per wagon could generate as much as Rs.7200 Crs in revenue then what is wrong with that?The real cause of Indian railway’s poor financial health is it’s high operating ratio,that is the ratio of operating expenses to gross earnings.Lalu did not turn around the railways,but he did bring the operating ratio down to 83%(In China, the railway’s operating ratio is somewhere between 74 to 77%)Also read

  21. Commentary: Political Comedian as Visiting Professor in Management Institution in India.
    Sat, 2006-09-16 04:14
    Prof. Dr. PL Joshi – Bahrain

    Lalu Prasad YadavIt is amazing news that Mr. Lalu Prasad Yadav, quintessentially rustic politician and Minister for Indian Railways, will be a visiting Professor in Management Institution in India (IIMs). He is scheduled to give his lectures to management students at IIMA on September 18, 2006. Now, the management students will learn the crafty and manipulative skills of management from a political comedian who downgraded the economic and education system of Bihar for decades in his “Jungle Raj” for one and half decades. My first reaction to the above invitation by IIMs would be that how many times did they invite Dr. Man Mohan Singh, a role model for young Indians, and the main architect of Indian reforms and modern India, to deliver lectures to their students, when he was not the Prime Minister. Why did not they do that?

  22. I am really surprised why people are giving so much importance to LPY…Its really interesting to see what IIM has learnt from LPY. Wondering if this was a publicity stunt??? Anyways, the reality is Laloo yadav ruled Bihar for 15 years and yet Bihar remained as the most illieterate, poor state in India. LPY was the epitome of corruption. Have you forgotten the chara ghotala, fodder scam ?? If we give importance to these people, then I am afraid they will encourage corruption in our country?

  23. As one renowned columnist put it :”This Laloo faces six not one criminal charges and one disproportionate asset case couldn’t Sonia Gandhi have waited until Laloo Prasad has proved himself innocent before inducting him into government”.This is the first mistake.Mistakes like this always happen in Indian Politics because it is full of people of such types one says you can’t help another fitting Ex:Our HRD minister Arjun Singh.Fine that’s how politics is you may say I ask Shouldn’t IIM(A) have waited till he was judged.(Looks to me the Prof’s of IIM have gober in their brains ((scoring a perfect CAT score is after all not a trait) otherwise they would not have invited this criminal on cover).What about the students .Why did they not protest.They could have resisted.This shows how poor this system is so weak. What kind of precedence are we setting by the way?That publicity matters more than morality? It is a fact that this guy is a criminal and the only reason he is still not convicted is because of the weak system. This however does not make him innocent anyway .(I mean if you carry a opinion poll in the country do you think the yeah’s will be less than 95% (The 5% no because these are the benefactors and so part of this vicious circle) By inviting a person such a character to its campus on their own to deliver lecture on management to its students IIM(A) and creating publicity to this person whose deserved place is prison for the crime he has committed, This act of IIM(A)according to me has caused great damage for morality (which is eroding fast) and I think IIM(A) must apologize for this particularly the professor who initiated this move.

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