Indian postal dept to play passing the parcel, opts for franchisee model
The largest postal network in the world, with over 1.55 lakh post offices, will soon reinvent itself if the Department of Posts (DoP) has its way.
In a major reform in the postal services, the DoP is considering a proposal to extend postal facilities through a franchising scheme.
Under the Universal Service Obligation, the department has to ensure that rural and far-flung areas are not denied access to postal services.
DoP has over 89% of its offices in the rural areas. Post offices in the rural areas are incurring losses more than the permissible levels. In the urban areas, where a minimum of 5% profit is required as per norms, over 50% of the single and double-handed offices are incurring losses.
To reduce deficit, the department plans to increase access to postal services. It wants to do this by franchising out its postal outlets. It will begin with a pilot project to assess the impact, sources said.
The new postal corporate units are expected to be financially self-supporting or generate profit without affecting the universal network. The revenue sharing model is yet to be decided.
The unions fear a drastic reduction in the 5.5 lakh workforce. But sources ruled out any large-scale downsizing. The present proposal is to introduce a franchise model operated by individual franchisees. Franchised outlets will be opened in newly developing urban areas where a post office cannot be provided for various reasons.
Only counter services are proposed to be franchised, while delivery and transmission will be continued. Linking arrangements for the franchised outlets will be provided by the department.
There will be two models, rural and urban franchising, wherein a contractual licence will be granted to the franchisee. This will require the franchisee to carry service on a particular business, using the franchiser’s expertise under the franchiser’s brand, as an independent enterprise.
In the rural model, the products and services proposed to be provided include sale of stamps and stationery, parcels and money orders.
