Lalu casts spell over US management students

New Delhi, Mar 24: After Harvard, Wharton, Stanford, Virginia and Texas, it was now the turn of students from the world famous Massachusetts Institute of Technology (MIT) Sloan Management School, US to hear from Lalu Prasad the amazing turnaround of Indian Railways here today. For an hour, the Railway Minister, wearing the cap of a 'management guru', spoke to the young corporates from the US, mixing economics with his rustic wisdom.

''When I was finished with my speech, the intelligent students were fully satisfied,'' he later told reporters.

Mr Prasad appeared exuberant while announcing that Indian Railways had raised loans through debt bonds in international markets at an interest rate of 5.75 per cent while Reliance had to pay an interest rate of 6.25 per cent for doing the same.

''This amply proves that the credibility of Indian Railways is on the upswing even in international markets,'' he added.

Mr Prasad listed a three-fold mantra to the visiting students for achieving success, honesty, determination and vision for future progress, which he had adopted to achieve the incredible turnaround of Indian Railways.

''I told them that wherever they are after finishing their education, they should always take into account the paying capacity of the ordinary people while formulating business strategies.'' The minister said the success and rejuvenation of Indian Railways had shattered the western myth that a loss-making enterprise could be salvaged only by downsizing and privatising.

''I have scripted a turnaround of Indian Railways without retrenching a single employee of the 1.4 million-strong workforce and without hiking fare for four consecutive years,'' he told the visiting students at the National Rail Museum auditorium here.

Asked by the students whether the Railways would be able to sustain its growth momentum, Mr Prasad argued that the success story would continue as ''we have come out of the woods to make a cash surplus of Rs 20,000 crore. We have laid out a new framework for carrying more people and doing more freight business with speed and efficiency.'' To the amazement of the young corporates learning their ropes in the bastion of western capitalism, the minister firmly ruled out privatisation of the core sector of the railways.

''Financial muscle to a written-off entity can be provided without resorting to the western business model. Privatisation will be allowed through the PPP route in areas of passenger amenity and dedicated freight corridor,'' he told the students.

Paradoxically, in the US, the bastion of capitalism, the Railways run at a loss and in Europe it survives basically on subsidies.

The minister showed his astute understanding of market reality and the finer nuances of the functioning and finances of the railways by frequently using expressions like 'internal resources,' 'operating ratio,' and 'fund balances.' The 'Professor' was at pains to explain how a huge organisation which was written off by the Rakesh Mohan Committee in 2001, had become the second largest profit-earning public sector enterprise after ONGC.

''Our turnaround strategy based on a perfect blend of commercial wisdom and empathy for the people has made the Railways a centre of attraction for the world. The spectacular achievements of the Indian Railways is not only in commercial terms but it has a human face too,'' he said.

Earlier in December last year, students from Harvard Business School and Wharton Business School had come to India to interact with the charismatic minister and have a first hand experience of the phenomenon that has fired the imagination of management experts and financial institutions the world over.

Last week, Mr Prasad had an interface with over 50 students from the McCombs School of Business, University of Texas and the Darden School of Business, University of Virginia.

UNI