Financial Daily from THE HINDU group of publications
Friday, Apr 14, 2006
Financial Daily from THE HINDU group of publications Friday, Apr 14, 2006 |
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Logistics - Supply Chain Management Markets - Stock Markets Our Bureau
Aiming to post profits DoP to invest about Rs 10,000 cr funds in special deposits Up to 35 pc of the amount could be invested in stocks as per IRDA regulations Funds to be deployed in a phased manner starting next fiscal AF Fergusson to work out modalities
New Delhi , April 13 In a significant move, the Government has allowed the Department of Posts (DoP) to invest up to Rs 10,000 crore from its life insurance schemes in various revenue-generating instruments, including stock markets. The move is aimed at enabling the postal department to reduce the budgetary deficit of around Rs 1,400 crore. Dr U. Srinivasa Raghavan, Secretary, DoP, said, "The Finance Ministry has allowed the department to invest funds of about Rs 10,000 crore in special deposits on the grounds that the department finds outside investment opportunities, including investments in stock markets." The DoP will be permitted to invest up to 35 per cent of the earmarked amount in stocks as per the Insurance Regulatory and Development Authority regulations. The department has appointed global consultants AF Fergusson to work out modalities and look into various investment options available; to begin with, it has suggested setting up an asset management company. A special cell within the DoP will be formed to manage the new project. Dr Raghavan added that the Finance Ministry has also indicated that Special Depository Rates (SDR) on investments in Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) will not be available after September 30, 2006. "Since the SDR will be withdrawn, we have sought level-playing field from the Government which will enable us to offer our insurance schemes to people in general."
Protecting investors
Dr Raghavan said that the DoP will take enough safeguards to protect investors in the two life insurance schemes. "We will take any decision in the regard only after careful examination and adopt a strategy, which will have enough safeguards to ensure safety of the funds." PLI has over 27 lakh policyholders and RPLI over 50 lakh as on March 31, 2006. The total business procured from PLI and RPLI during 2005-06 was a massive Rs 13,812 crore, as compared to Rs 11,038 crore in the previous year, with a growth of 25.14 per cent. The funds would be deployed in a phased manner in the stock markets starting next fiscal. The DoP has been grappling with a budgetary deficit of around Rs 1,400 crore and has designed new products and services in a bid to reduce it.
Facilitating e-commerce
There is also a plan to use the retail network of the post offices as a front end for e-commerce. Services such as Express Parcel Post, e-Post, Value Payable Post and the payment gateway facilities are being re-engineered to facilitate e-commerce activities. The DoP is also introducing a portable, digital, hand-held delivery-cum-sale system that will facilitate proof of delivery in real time to customers. It has also launched the 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.
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