Govt may review subsidy on postal services & goods
The government is considering a review of the subsidy on postal services and products. At present, a plain postcard priced Re 0.50 is subsidised by Rs 5.55, while printed post cards carry a subsidy of Rs 3.81.
Money orders carry a subsidy of Rs 29. The governments total subsidy burden on various postal services including postcards, registration, money order & printed books in 01-02 was Rs 1,425 crore.
The department of posts officials are of the view that there is no justification for subsidising services like registration, newspapers, postal orders and money orders.
As a part of the government policy, postal services in India are highly subsidised.
While subsidy on a few items that are very necessary for achieving universal postal service obligation (UPSO) may be justified, the pricing of other services needs to be done on a cost basis and what the market can bear, said an official of the department of post (DOP).
Post offices sell an ordinary postcard at Rs 0.50, while its actual cost to the DOP is Rs 6.05. Similarly, a printed postcard is sold at Rs 6.60, while its actual cost is Rs 10.41.
Subsidy on one money order is to the tune of Rs 28.94. Currently, a money order to send between Re 1 and Rs 1,000 costs Rs 5. Similarly, the subsidy on sending a registered newspaper is Rs 78.6. DOP subsidises a book by Rs 11.
The officials say that the policy of blanket subsidy on all postal products and services should be done away with.
The tariff on non-universal service obligation services should be fixed on commercial principles. Tariff of these services should be revised from time to time.
The government recently increased postal tariffs by up to 100%. The new tariffs that were implemented on June 1 increased prices of letters to Rs 5 for weight up to 20 grams.
Earlier, the cost of a letter was Rs 4. New rates for books, pattern and sample postcards are Rs 4 (Rs 3 earlier) for the first 50 grams or fraction thereof.
Copyright 2002 The Economic Times of India, Coleman & Co Ltd. Source : Financial Times Information Limited
Copyright © 2002 Financial Times Information Services Limited. All rights reserved.
