Raja may dust off postal bill in bid to revive India Posts
After putting the issue on the backburner for a couple of months on account of strong protests from private courier players, the ministry of communications under telecom minister A Raja has now revived work on amendments to the controversial postal bill.
Private courier companies are opposed to the proposed bill as it intends to prevent them from carrying any letter or parcel below 150 grams and also seeks to limit the foreign direct investment in the sector to 49 pct. The bill also envisages that private courier companies who want to deliver letters below this slab (150 grams) do so at a price which is five times more than the rates charged by India Post or 2.5 times Speed Post rates.
At the same time, the communications ministry is yet to take a call as to whether the bill would be introduced in the current session of the Parliament.
The source also said that despite opposition from private courier industry, the government was unlikely to renegotiate on key issues like creation of a regulator for the postal sector — Mail Regulatory Development Authority, the 150 grams weight slab reservation for India Post and mandating that large courier companies pay 10 pct of their total revenues as an universal social obligation fee as in the telecom sector.
The ministry official also added that the government was yet to take a final call on limiting the FDI cap to 49 pct. If this FDI cap is imposed, then multinational players like DHL, TNT and Federal Express will soon have to go scouting for Indian partners.
Besides, the draft bill also recommends that foreign players be subject to an entry fee of Rs 1 million and a renewal fee of Rs 0.5 million per annum, as against Rs 25,000 and Rs 10,000, respectively for Indian courier companies.
The Express Industry Council of India (EICI), the umbrella organization representing both domestic and international courier companies in India, has said that the proposed amendments, if approved, could maim the Rs 35 billion, domestic industry, especially the small players while also limiting the choice for consumers.
EICI has also said that if this bill were to be enacted, it would not only restrict further foreign investment in the industry, but would also require already existing FDI in India to be sold to Indian investors. “This will send a message to other global companies in all industries that any level of investment in India could be changed arbitrarily,” it added in its communication to the government.
Additionally, the apex body has also said that reducing the existing foreign investment level in the express services sector was contrary to the global norm of opening express services to foreign investment, while adding that even China permitted wholly-owned foreign enterprises in the express services sector.
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