INDIANRAILWAYS

* The effect of INDUSTRIAL REVOLUTION (2nd half of 18th c to 1st half of 19th c.), Great Britain

* Invention of “Steam engine” by James Watt for railways led to radical changes in transport system all over the world.

* Railways are the conveinent mode of transport for long distances.

* Suitable for carrying heavy and bulky goods like. Iron & steel, ores ..

* Carries raw materials from mines and quarries .. and other interior areas of the country to industrial centers.

* Link up the various regions of the economy and increase theoccupational mobility of the people.

* In short, They play a crucial role in the economic development of the nation.

• Indian Railways is 150 year old

• It is largest railway system in world under one management

• It is a lifeline of our country.

• It is biggest civilian employer in the world.

• No strike in last 30 years in spite of 17 lakh workers.

• Always targeted by public during any rally, agitation etc

• 1853 First railway train journeyed distance of 22 miles between Bombay and Thana.

• Orginally, operated by private companies Englishmen.

• 1925-1950 GOI took over the all the private railway companies.

• Development during 5-year Plans• INDIAN RAILWAYS have now become a largest

unified State-enterprise.

RAILWAY DEVELOPEMENT UNDER 5-YEAR PALNS

FIRST PLAN (1951-56)

Rehabilitation and Replacement of over-aged assets.

SECOND PLAN (1956-61)

Particular emphasis to prepare the Railways for carrying the traffic generated by the new steel plants and the increased production of coal.

THIRD PLAN (1961-66 )

Building up additional capacity so as to be ahead of the traffic demand and toprevent bottlenecks;

FOURTH PLAN (1969-74) to SEVENTH PLAN (1985-90)

Modernisation of the system to improve the efficiency of operations; and High priority to the developement of freight terminals to facilitate the free and Accelerate the conversion of stream locomotives to diesel and electric tractionSmooth movement of wagons;

EIGHTH (1992-97) AND NINTH PLANS (1997-2002)

The main thrust was on Capacity generation, Man-power planning and Energy conservation, Safety & Security, and Customer satisfaction through reliable and better quality of services;

TENTH PLAN ( 2002-07)

Capacity expanision through Modernization and Technological upgradation of the railway system, Improvement in quality of service, Rationalization of tariff and Improvement in Safety and reliability of railway services.

ELEVENTH PLAN ( 2007-12)

- Major initiative in shifting to PPP for building and operation of selected railway infrastructure.

- Provision of quality passenger amenities at terminals, overall improvement in the sanitation.

- Outsourcing routine activites to private comapies.

-Introduction of modern Rolling stock

-Appropriate changes in designs of wagons.

Particulars At the end of1950-51 1970-71 2005-06

Route length (kms) of which Electificed (kms)

53,600

390

59,800

3,700

63,370

17,910

Passengers originating (millions)

Goods orginating (million tons)

1,290 2,430 5,830

93 197 666

PROGRESS OF INDIAN RAILWAYS UNDER THE PLANS SINCE 1950-51

SOURCE: Explanatory Memorandum on Railway Budget, 06-07

The data given in the table indicate :

- Trend towards Modernization since 1950-51.

- In terms of route length, the Railway network had grown by only 18% between 1951and 2006.

- But Frieght transport had increased by about 600% and the passenger movement by 400%.

- Increase in transport output has been brought about by more intensive utilization of the available assets, improvement in productivity and technological upgradation.

MAJOR CONCERNS OF INDIAN RAILWAYS

* LOW CAPACITY UTILIZATION AND AGUMENTATION

* OVER STAFFING, LOW PRODUCTIVITY

* DELAYED SERVICES AND MOVEMENT.

* OVERAGED AND OBSOLETE ASSETSAbout 25% of the total route length, 80% of the equipment in IRand large portion of Rolling stock to be replaced.

* PAINFULLY SLOW TECHNOLOGY UPGRADATION.

* LACK OF CUSTOMER ORIENTATION.- Unhygenic sanitation, toilets, comparments- Late arrival time.

* LACK OF RAIL-ROAD CO-ORDINATION.

- Feasibility study should be conducted by experts taking into account the geographical location, topography, population density and prominence of that place.

* CORRUPTION AND LOT OF BEAUCRACY .

* IMPROPER RAIL CONNECTIVITY RURAL -URBAN AREAS.

* RAISING MAINTENANCE COST, FUEL COST.

* EXPLOITS MONOPOLY POWER. i.e., NO DIRECT COMPETITORS.

* LOWER SAFETY AND SECURITY- Easy Target for terrorist, naxalite.. -

In the last two years of 10th Plan (2002-07)

i.e., 2005-06 and 2006-07:

* Spectacular increase in productivity

* Quantaum exapansion in Capacity augmentation

* Increase in Railway receipts

* Control of Railway expenditure and huge surpluses.

* Modernisation and Technology upgradation of IR

* Reduction of Maintenance cost

* Extensive application of Information Technology

* Popularity by increased Consumer satisfaction

Before Laloo joined as Union Railway minister, 2004

Hopeless, loss-making organisation, white elephant.

Too little revenues but too many problems along with too many employees.

Indian Railways was spending 91% of its revenues on salaries and maintaing its aging organisation alone.!!

This “White elephant” had a debt of about Rs.61,000 crores ($12.3 billion)

After Lallo took over IR, 2005 onwards.....

IR has turned in a cumulative cash surplus before dividend of Rs 68,778 crore ($13.9 billion). Out of this Rs 15,898 crore has been paid as dividend, Rs 39,215 crore has been invested in rail infrastructure and Rs 13,665 crore has been added to fund balances to reach Rs 20,483 cr.

What were the reasons behind the DRAMATIC TURNAROUND was seen in Indian Railways....

? ? ?

What did the minister do to turnaround Indian railways? 

Refused to hike fares. Shored up earnings by carrying more passengers and freight.

Increased the load carried by a goods wagon from 81 tonnes to 90 tonnes. This gave an additional earning of Rs 7,200 crore.

Upgraded tickets if seats were going vacant in the upper class. So, waitlisted passengers could be allotted seats.

Maintained passenger profile so that bogies could be taken off or added to trains according to seasonal demand.

“The solution lay in increasing volumes and not the cost ”

Lallu's Success secrets* Down-to-earth attitude and traditional wisdom.

"My mother always told me not to handle a buffalo by its tail, but always take it by its horns.”.

“If you do not milk the cow fully, it falls sick.”

* Choose the right people! - Sudhir Kumar, a brilliant Bihar cadre IAS taken as OSD.

* Don’t Micro Manage, Delegate your work, take calculated risks!

* Information is wealth if used properly.

* Think out of the box. Implement creative & innovative ideas.

* Do what makes sense. Be practical.

BIBLIOGRAPHY

S K Misra and V K Puri, Economic Environment of Business Page no. 289

Ruddar Datt, M Sundharam, Indian Economy Page no. 139

Financial Turnaround of Indian Railways: Good Luck or Good Management

by Dr Desh Gupta and Dr Milind Sathye

''Turnaround of Indian Railways: A Critical Appraisal of strategies and Processes'. by IIM-A professor G. Raghunathan

HARISH S

USN: 4SN08MBA20

“Akshatha”Door No. 2-16-1404/3Pragathi ColonyBejai, MangaloreKarnatakaPIN 575004

har_999@hotmail.com

HARISH S

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