The financial Status of Indian Railways was not as such as it is today.

Indian Railways was going in a huge loss before it came into the hands of Mr.Lalu Prasad Yadav.

Here I am sharing the strategies followed by Mr. Lalu to bring Indian railways where it is today......

THE LOSS MAKING ERA OF INDIAN RAILWAYS

“Indian Railways is today on the verge of a financial crisis. To put it bluntly, the Business As Usual Low Growth will rapidly drive IR to fatal bankruptcy, and in sixteen years Govt. of India will be saddled with an additional financial liability of over Rs. 61,000 crores (15.35 billion US $). On a pure operating level, IR is in a terminal debt trap.”

- Expert Group on IR headed by Dr. Rakesh Mohan – July 2001

q Sectors due to which Railways incurred Losses

• Passenger Business.

• Reduction in the share of Transport Market.

• Freight Segment.

• Scrap Disposal.

• Increase in wages and salaries.

• Social Service Obligations.

Turnaround of Indian railways

• Indian Railways (IR), which was declared to be heading towards bankruptcy as per the Expert Group on Indian Railways in 2001, is today the second largest profit making Public Sector Undertaking after ONGC.

STRATEGY ADOPTED TO REDUCE LOSSES

• Play on volumes

• Reduce the unit cost

• Pass on the benefits to the consumer.

• Improvisation or reinventing instead of restructuring

• Increasing length, seating capacity and occupancy

• Optimizing layout of coaches

• Standard composition of trains

• Reducing losses on catering and parcel services

• Increasing non-passenger fare income

Major Steps Undertaken:

• IR created a Special Railway Safety Fund of Rs. 170 billion to improve safety environment, through replacement of over aged railway assets, that is, tracks, bridges, rolling stock, signaling gears etc.

• In the last four years, the Railways have upgraded 210 mail and express

trains to the super-fast category, taking the total number of such trains to 350.

• Use of high technology for passenger safety (train safety devices like Train

• Protection and Warning System and Anti-Collision Devices).

• Security: Railway Protection Force was strengthened to escort passenger trains in security sensitive areas.

• Cleaner Trains

• Book stalls

• Reducing journey times

• Increasing bogies

• Special Measures for Women commuters

Tatkal (instant)-reserved tickets

• In the last three years, the number of tatkal seats were increased to more than doubled.

• In 2005-06, the daily average number of berths in tatkal quota was 43,000. The next year, it increased to 57,000 and in 2007-08 raised further to 98,000.

• Tatkal revenue for the Railways almost doubled from Rs 200 crore in 2006-07 to Rs 396 crore in 2007-08.

FREIGHT BUSINESS IS A PLAY ON VOLUMES

Driven by :

Ø Improved wagon turnaround and axle load

Ø Tariff rationalization and dynamic pricing policy

Ø Efficiency improvements and targeted investments

• SWOT Analysis of IR

Srength

• Energy efficient

• Human resource

• Bulk loading and unloading capability

Opportunity

• Changing technological

• Environment

Weekaness

• Dense traffic corridors are on the increase.

• Inherent limitations of being a Government department

• Not a door to door mode of transport and faces competition from ‘higher priority’

Threats

• More demanding