The Hindu Business Line : Premium products lift Dept of Posts' revenues

PREMIUM products like logistics and financial services seem to be doing the trick for the Department of Posts (DoP), which has been grappling to reduce the Budgetary deficit of nearly Rs 1,400 crore.

Revenue from the premium products category of India Post has been growing at a steady rate of an average of 30 per cent a year.

In 2004-05, the revenue earned from premium products was Rs 953.31 crore, which was one-fifth of the total revenue.

In 2005-06, revenue from premium products has already touched Rs 658.44 crore as of October, according to an official release.

Important policy initiatives being planned in the first quarter of the next year include launch of an online domestic money transmission service called iMO, which will offer assured time-related money delivery.

There is also a plan to use the retail network of the post offices as a front-end for e-commerce.

Post office counters would accept money and deliver orders and services such as Express Parcel Post, e-Post, and Value Payable Post, and the payment gateway facility is being re-engineered to facilitate e-commerce activities.

The DoP is also introducing a portable digital handheld delivery-cum-sale system that will facilitate proof of delivery in real time to the customers.

In a bid to reduce the deficit further, the Department has also sought approvals to function as a full-fledged bank.

It has also launched corporate e-post, which allows corporate customers to print their messages including text and picture on official letterheads and send them simultaneously to up to 9,999 addresses in one go.

To facilitate savings bank customers, who are looking at various saving options to invest their savings, the DoP has initiated a process of setting up Postal Finance Marts throughout the country.

Some 300 such marts will be set up by 2007. Of these, 150 will be set up during the current fiscal.

During the year, a host of new products were added like `Logistics Post', to exploit the market for bigger parcels and consignment loads, `Bill Mail Service', to provide a cost-effective communication tool for periodic financial instruments, and `Direct Post', to provide a cost-effective direct marketing avenue for unaddressed articles.

The DoP has engaged KPMG to undertake a system study of the postal network to make the assessment of existing products in terms of utility and economic viability. The report is likely to be submitted in the next month.

An inter-Ministerial group has also been appointed by the Cabinet Secretariat to study the existing practices in the DoP for eliminating its fiscal deficit in the shortest possible time.

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