India Post lines up Rs 6K cr to connect post offices
In a bid to cut down losses and achieve a higher degree of competitiveness, the Department of Post has put together an ambitious action plan to connect most of its major post offices across the country. The Department is planning to invest Rs 6,000 crore for the technology upgradation across its postal network.
“India Post strongly needs to enhance its technology to compete with the private players,” Department of Post secretary I.M.G Khan said, adding that “We have put forward our proposal to the Planning Commission for consideration in the 11th Five-Year Plan”.
The DoP has an investment plan of Rs 12,000 crore during the 11th Five-Year Plan (2007-12). Khan said his department would invest 50 per cent (Rs 6,000 crore) of its proposed expenditure of the 11th Five-Year Plan in computerising and connecting its 1.5 lakh post offices across the country.
“We are setting up a National Data Center in Delhi, which will be ready by May and would connect about 1,300 major post offices in India while the rest would be connected through other technology,” Khan added.
He said there are various possibilities of leveraging our huge network for other business models such as retail, banking and insurance. The Department of Post is already in talks with some general insurance companies for fee-based distribution of non-life products in the rural market.
Besides, “We already have tie-ups with 2-3 banks in Maharashtra for providing priority sector lending to farmers,” he said. With these new initiatives and upgradation of the network, DoP expects to do away with its budgetary deficit of Rs 1,200 crore in the next 2-3 years, he added.
The Department is also planning to outsource Enterprise Resource Planning (ERP) Systems that will integrate about 8,000 computerised post offices all across the country, Khan said, adding that the tenders for these solutions would be announced shortly.
DoP earned a revenue of Rs 5,000 crore with expenditure at Rs 6,200 crore in 2005-06. “Over the last three years, our revenue has grown by 13.5 per cent whereas expenditure grew at 7.22 per cent. With this trend, we expect to close the gap between revenue and expenditure in next 2-3 years and break even,” Khan said.
