India Post re-invents itself

India: Leaving a stamp
From BUSINESS LINE, September 14th, 2001

IT IS GOOD to find the Department of Posts (DoP) trying to live down
its traditional image of a low-profile, sluggish organisation. The
series of non-traditional business initiatives the DoP has taken in
recent years indeed mark its efforts to reinvent itself. It has
already made a reasonable success of the value-added service
ventures, such as Speed Post, Express Parcel Post, Business Post,
Media/Publicity Post, Corporate Money Order and Surface Air Lifted
Mailing. In some of these segments, it was pitted against the
expanding private sector courier companies. Thereafter, it embarked
upon the totally new business of selling customised greeting cards
with pre-paid printed postage stamps that are a replica of the
design on the card. In yet another breakthrough, it struck a deal
for international money transfer services with Western Union
Financial Services International of the US. The slew of arrangements that it has been able to consummate with
several domestic mutual funds in recent times for selling their
products through select post-offices can indeed be traced to the
agreement with the US outfit. In a sense, the DoP and the MF
industry have seen a convergence of business interest to mutual
benefit. Obviously, the extensive network of DoP – it has over 1.55
lakh post offices – attracted the attention of mutual funds which
found in the network an opportunity to reach out to a larger number
of investors. The network factor is also behind the decision of
MasterCard International to launch a range of payments programmes
through the Post Office Savings Bank. Among its very recent new
businesses are Speed Post Passport service and ePost. The e-Post
scheme may be viewed as an initiative to bridge the digital divide
in that it helps a person send mails to those not having access to
the Internet. The image of the DoP, which today boasts of a sweet-sounding
brandname, India Post, is thus far removed from what it was till
even the mid-1990s. As a result of the increase in the prices of postal articles, higher
service charges and earnings from new businesses, the DoP's receipts
were well above the Rs 3,000 crore-mark for the first time in
2000-01. For this fiscal, it has budgeted receipts of Rs 3,752 crore,
targeting an increase of Rs 405 crore, without a raise in service
charges and prices of postal articles. The gap between expenditure
and receipts is projected to narrow to Rs 1,556 crore at the end of
2001-02 from Rs 1,660 crore in the last financial year. If the
momentum in receipt growth is maintained, India Post should
hopefully be able to wipe out the budget deficit in the next
four-five years, if not earlier. In that situation, it will also qualify for a Plan outlay much
higher than Rs 135 crore for this fiscal. As the DoP already has too much on its plate, it will be
well-advised to consolidate its expanded activity, before taking up
more new businesses. After all, it also has to maintain and improve upon its traditional
services. Apart from modernising the existing post offices including
the extra departmental ones, opening of new post offices and
panchayat communication centres, it has to install computer-based
multi-purpose counter machines, set up LAN for savings bank
transactions, create satellite money order centres, computerise
philatelic bureaux and construct its own buildings at a large number
of locations. The new commercial orientation calls for intensive
training and skill upgradation programmes for the rank and file. It
is also to be hoped that the extremely backward north-eastern region
will have a higher priority in its development schemes. The
'lumpsum' provision for projects under Plan head in the seven
North-East States and Sikkim in the 2001-02 Budget is a meagre Rs
3.81 crore.
Copyright 2001 Kasturi & Sons Ltd (KSL).
Source: World Reporter (Trade Mark) – Asia Intelligence Wire.BUSINESS LINE, 14th September 2001