Government of India urged to review postal subsidy

The Economic Survey 2003-2004 has urged the Government of India to review the postal subsidy, which is estimated at Rs1,204 crore for 2004-2005.

The survey said that though deficit dropped from Rs1,550 crore in 2000-2001 to Rs1,364 crore in 2002-2003, the Government needs to clarify the size of the subsidy. All services of the post offices are currently subsidised. User charges in the postal system covers about 78 percent of the costs. The biggest subsidy is on money orders with a per unit subsidy of Rs28.50. This adds up to about Rs331 crore to the postal deficit.