Click to play videoNew Delhi: Jack Welsh's GE philosophy - fix, sell or close down - cannot work in sensitive departments like the Indian Railways.
From being jeered as a tainted minister in 2005 to being able to boast with a Rs 25,000 crore cash surplus last year, Lalu Prasad's turnaround of railway finances has been the subject of much debate.
It has also inspired a book published by Oxford University Press, with a foreword by Prime Minister Manmohan Singh that President Pratibha Devisingh Patil will release later this month.
The book is also subject of a doctoral dissertation at Columbia University. The main message is that sensitive sectors cannot be reformed unless bureaucrats respect a minister's political mandate and the minister in turn refrain from daily meddling.
"The mandate is characterised in the case of Lalu in the form of I will reduce passenger fares, I will not privatise the railways, I will not downsize," said Officer on Special Duty to the Railway Minister, Sudhir Kumar.
Without naming them, the book says that Lalu began by restraining his family from treating Rail Bhavan as Bihar Bhavan.
The strategy followed by railways under Lalu has been to curb departmentalism, meet market test and societal value test, and create apolitical space by isolating sensitive areas.
The authors say that the bane of the railways is not so much political interference as departments functioning as silos.
While every decision must meet the market and societal value test, not more than a fifth of the decisions are politically sensitive, leaving the rest for application of commercial principles.
The reformers realised that they could not cut costs in a government undertaking, which is why they spread the costs over a larger volume of traffic, and that is how the railways made huge profits.
A committee in 2001, headed by Rakesh Mohan, who is now the Reserve Bank on India Deputy Governor, recommended unbundling and corporatisation of railways, and spinning off non-core activities, which the authors say is politically unfeasible.
The question is whether, without competition, can the railways pass the service quality test?
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