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    Indian Railways

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    Indian Railways is seeking to modernize operations through increased marketing, restructuring, and privatization initiatives. Marketing efforts include expanding services for different income groups, reducing fares, and dynamic pricing. Partial privatization of non-core activities like catering has generated higher revenues. Complete privatization may not be suitable given the railways' size and role in the economy. Restructuring certain activities could introduce benefits of private sector efficiency while maintaining critical public services.

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    Indian Railways

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    Indian Railways is seeking to modernize operations through increased marketing, restructuring, and privatization initiatives. Marketing efforts include expanding services for different income groups, reducing fares, and dynamic pricing. Partial privatization of non-core activities like catering has generated higher revenues. Complete privatization may not be suitable given the railways' size and role in the economy. Restructuring certain activities could introduce benefits of private sector efficiency while maintaining critical public services.

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    Indian Railways is seeking to modernize operations through increased marketing, restructuring, and privatization initiatives. Marketing efforts include expanding services for different income groups, reducing fares, and dynamic pricing. Partial privatization of non-core activities like catering has generated higher revenues. Complete privatization may not be suitable given the railways' size and role in the economy. Restructuring certain activities could introduce benefits of private sector efficiency while maintaining critical public services.

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    4K views28 pages

    Indian Railways

    Uploaded by

    bagavathyb
    Indian Railways is seeking to modernize operations through increased marketing, restructuring, and privatization initiatives. Marketing efforts include expanding services for different income groups, reducing fares, and dynamic pricing. Partial privatization of non-core activities like catering has generated higher revenues. Complete privatization may not be suitable given the railways' size and role in the economy. Restructuring certain activities could introduce benefits of private sector efficiency while maintaining critical public services.

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    Indian Railways

    Growth, Sustenance and the Leap Forward

    Ankit Gupta 2003CS10153


    Vidya Bhat 2004BB50025
    The Turnaround Story
    Earnings and Expenses

    Data source – Year Books, Ministry of Railways (1987-88 to 2005-06)


    The Turnaround Story
    Operating Ratio

    Data source – Year Books, Ministry of Railways (1987-88 to 2005-06)


    Indian Railways
    Growth, Sustenance and the Leap Forward

    Critical questions:

     Marketing

     Restructuring and
    Privatization

    Guiding Indian Railways


    to the Future
    MARKETING

     Shift from the „Supply‟ concept to the


    „Marketing‟ Concept.

     NEED: Competition from low cost airlines (LCAs)


    like Air Deccan.
     Time of travel.
     Fares.
    Passenger distribution
    Number (in million)
    Year 2001-02 2002-03 2003-04 2004-05

    Railways 5,093 4,971 5,112 5,475

    Airlines 12.81 13.32 14.54 18.17

    Source: 1. „Turnaround‟ of Indian railways: A critical appraisal of Strategies and Processes, G. Raghuram
    2. Ministry for Civil Aviation
    Fare comparison

    Source: The Hindu Business Line


    Income distribution

    Source: http://pdf.wri.org/hammond_india_profile_xls.pdf
    Income based segmentation

    Source: http://www.iies.su.se/~zilibott/und/AdvMacro2006/figures.pdf
    Services IR can offer:
    Lower class Middle Class Upper Class
    Segment (< Rs. 3 lakh (Rs. 3 – 10 lakh (> 10 lakh p.a.)
    Service p.a.) p.a.)

    Travel

    Intermediate distances

    Tourism
    (Luxury
    trains)
    What has been done…

     Increase in number of super fast trains.


     Reduction in fares
     Differential pricing based on time of booking:
    The „Tatkal‟ scheme.
     Automatic upgrades to passengers.
     Improvement in service quality.
    The way ahead…
     Lower class:

     unreserved compartments in new trains to be


    increased from four to six.
     efforts to be made to increase unreserved
    second-class coaches in existing trains.
     Wooden seats in ordinary class passenger trains
    to be replaced by cushioned seats.
     Middle Class
     Eight new Garib Raths and 32 pairs of new trains
    to be introduced in the coming year.
     200 trains to be made superfast.
     Dynamic pricing: Differential discounts in peak
    and off-peak seasons.
     reduction of super fast charge on second-class
    tickets by 20 per cent from Rs 10 to Rs eight.
     Cyber cafes and ATMs to be opened at major
    stations.
     E-tickets
     Made cheaper
     to be made available for all mail and express trains.
    PALACE
    ON
    WHEELS

    The Twin bedded Saloon The Bar Lounge


    The Bar Lounge The Exterior
    Brand ‘Laloo’
    Privatization does reap benefits….
    Privatization does reap benefits….

    How about privatizing the whole


    Indian Railways now?

    Shri Lalu Prasad Mr Anil Ambani


    Minister CEO
    Indian Railways Indian Railways
    British Railways
    Privatized in 1990s

    British Railways

    Till 1980s
    British Railways
    Privatized in 1990s
    Shortcomings
     Atomization of BR
     Maintenance of a network of more than 100
    companies
     Increase in government expenditure –
    2 Billion Pounds annually

     Role of government still required

     Employee dissatisfaction
    Is complete restructuring
    really required in India?
     Critical role of railways in economy
     Too complex system
    Is complete restructuring
    really required in India?
     Critical role of railways in economy
     Too complex system

    Advantages of Commercialization
    • Competitive Rates
    • Less political interference
    • Financial freedom to an extent
    Is complete restructuring
    really required in India?
     Critical role of railways in economy
     Too complex system

     Need of partial restructuring


     Non core activities outsourced
    Commercializing Activities
     Annual Catering Contracts
     Howrah Kalka Mail – Rs 83.6 lakhs from Rs 5 lakhs
     License fee (Bandra) – Rs 16 lakhs from Rs 78,000
     Licence fee (Nagpur) – Rs 34 lakhs from Rs 32,000

     Hotels
     Talks on with the Oberoi Group

     Food Plazas
     Vending machines …..
    Data Source - IIMA analysis of the Railways Turnaround (G. Raghuram)
    Indian Railways
    Growth, Sustenance and the Leap Forward

    Critical questions:

     Marketing

     Restructuring and
    Privatization

    Guiding Indian Railways


    to the Future
    References
     Indian Railways at Crossroads – Case Study on IR, ICMR, ICFAI
     Indian Railways, Wikipedia
     “Turnaround of Indian Railways: A Critical Appraisal of Strategies
    and Processes”, G. Raghuram, W.P. No.2007-02-03, Feb 2007,
    IIMA
     “There‟s no such thing as Free Ride”, Special Report – IR, The
    Economist, Dec 6, 2003
     “Indian Railways Presentation on the turn around”,Sudhir Kumar,
    Officer on Special Duty to Minister of Railways, Govt. of India
     “The Privatization of Railways in Britain”, Bill Bradshaw, Japan
    R&T Review, Sept 96
     “Alternative Approach to Restructuring”, A.V. Poulose,
    www.irastimes.org/mrpoulosearticle.htm
     “Privatization of British Rail”, Wikipedia
     Official sites of Indian Railways, Finance Ministry, IRCTC, Civil
    Aviation, Palace on Wheels, Deccan Odyssey

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