• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Like its counterparts elsewhere, India Post is struggling to beat back the forces of technological change. Its mail traffic has fallen steeply over the last 15 years, thanks to the growth of the Internet, private courier services and the telephone network. But its attempts at diversification and innovation have met with modest success, as its deficit fell marginally from Rs 1,382 crore in 2004-05 to Rs 1,250 crore in 2006-07. This sum roughly equals India Post’s pens ion payouts, which suggests that the organisation has, to some extent, overcome setbacks in its core business. The Minister of State for Communications and Information Technology, Mr Jyotiraditya Scindia, has suggested that the Finance Ministry spare India Post of its pension burden. But that is ducking the real issue, which is to ramp up India Post’s revenues so that it can meet its obligations. A move to restructure the organisation is underway, with McKinsey looking into the possibilities in this regard.

Financial products are an area of promise, given India Post’s network of 155,516 post-offices, 89 per cent of which are in the rural areas. The network can play a role in financial inclusion, now restricted to just 59 per cent of the adult population, or about 400 million, without banks incurring brick and mortar costs. India Post has already expanded its traditional range of offerings — savings bank facilities, life insurance, pension payouts to government employees and money orders — to include international money orders, distribution of mutual funds, electronic funds transfer and sale of government securities. But that is not enough.

Post-offices can evolve into information kiosks for government services, besides buying and selling foreign exchange, and perhaps even acting as passport offices. They could enter into arrangements with Internet auction firms to deliver goods and provide a platform for transactions. However, to diversify in this direction, the India Post network would have to be completely computerised. The key issue in postal reform, which Mr Scindia omitted to mention, is to mop up the necessary capital to this end. As has been suggested in the case of the UK’s Royal Mail, also beset with mounting operational losses, India Post should be corporatised to raise the necessary resources, with the government retaining majority stake. The Dutch government sold most of its shares in its state-owned post company in 1993-94, and since then the going has only got better. The company, TPG, is not just making money, but has more people employed in mail services than a decade ago. Given India Post’s network and the large market for financial services, in particular, waiting to be tapped, there is no reason why the same cannot happen here.

More Stories on : Editorial | Supply Chain Management

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Future of India Post

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line