The Indian Railway King

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How did India’s Huey Long become its Jack Welch?

Lalu mismanaged Patna terribly. So how has he managed a gargantuan state organ so well that students from Kellogg and Wharton are taking notice?

Part of the answer lies in India’s recent economic growth spurt: Lalu stood on the shoulders of an economy that never grew by less than 6 percent per year during his whole tenure as railways minister. (India’s economy has slowed considerably since the global downturn began.) With a boom like that to fuel demand, how could he fail? All he had to do was sit back and let the market propel him forward. Indeed, Sushil Kumar Modi, the politician who claims to be picking up after Lalu’s mess in Bihar, notes that Lalu still spends all his time in Bihar, and rarely visits his own New Delhi office. The railway turnaround began before he took over the ministry, during Nitish Kumar’s reign, although few predicted that it would continue as it has. The most cynical of his critics expect to discover after Lalu has left the ministry that safety corners have been cut, and that his successor will have to deal with a series of derailments and bridge collapses. But outsiders such as Ditmeyer say that Lalu’s management has been fundamentally sound, assuming he’s making the proper investments in maintenance.

The other half of the explanation, though, seems to be a simple case of democracy and markets working. One of the salutary effects of India’s recent boom is that people such as Lalu have more opportunities to be measured, and even civil servants such as Kumar are eventually subjected to the same pitiless bottom-line scrutiny that businesses face. Only recently did India really begin to shake off its penchant for state-owned enterprise. By the time Lalu took over, it was no longer possible for Indian Railways to run as if it were a monopoly in the transportation sector, or as if it were a Lalu fiefdom, as Bihar was for so long.

Sankarshan Thakur, the journalistic gadfly who wrote a caustic account of Lalu’s failure in Bihar, says Lalu is managing the railroads competently as penance for his mismanagement of Bihar. “Lalu got insecure,” Thakur says. “He was sorely wounded by defeat in Bihar, and he needed to recover.” The railways ministry is a constituency-building ministry, one that allows a politician to be observed succeeding. He had failed in Bihar, and if he hoped ever to recover the leadership he once enjoyed, he had to run the railways ministry with exemplary competence. Everyone is watching, including the peasants. Lalu’s constituents are now not only voters but customers. Biharis kicked him out once already, and he’s acting responsibly so they don't do it again.