Who is the best firm among Reliance, ICICI Bank, SBI and Indian Railway? If this question comes to you, you would name any of the first three as the best firm but would not prefer to term Indian railway as the best firm in India. But you are wrong here. According to a railway ministry official, the Indian railways have become more efficient firm in comparison with some well-managed firms such as Reliance, ICICI Bank and SBI.

The official said that return on investment in railway is being projected at 19.6% during 2006-07. However, the Reliance has projected the return at 18% for the same period. The ICICI Bank has estimated its return on the investment at 11%. The largest public sector bank has projected it at 8% in the same time period.

The Indian Railway had got the capital investment of of Rs 75,867 crore in the year 2006-07. In the same time period it has earned a profit of Rs 14,869.74 crore. The railway official said at the same time that in the next year railways’ net profit would probably touch Rs 16,022 crore mark with the invested capital of Rs 89,000 crore.

Later, the official told to the Times of India that the he has projected the figures conservatively. In real terms, the figure may go up to achieve better return on the capital invested.

It seems, the better utilisation of railway’s resources has changed the scenario of railways and enhanced its capital investment and profit ratio as well.

The most important part of the story is that it all happened without reducing subsidies, without cost cutting and downsizing the number of employees. The fundamental mantra behind the turnaround story of Indian railway is nothing but the determination and better utilisation of resources available.

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