With new Indian law, courier market won't deliver

At a time when postal departments around the world are tying up with private players in the courier industry, the Indian government plans to bring the courier market and its players under regulation, and that too through the Department of Posts, which, strictly speaking, is an “operator” too.

Representatives of the Express Industry Council of India (EICI) representing 2,300 companies – in which the size of the organised sector (20-odd players) market alone is estimated at Rs 1,700 crore – are meeting the policy-makers and MPs to effect changes in the Indian Post Office (Amendment) Bill, 2002, making room for an independent regulator and an appellate body for judicial recourse. The bill is under the consideration of the standing committee on IT, which is to table its report in the budget session.

Speaking to ET, EICI chairman Tushar Jani, who is also the chairman of Blue Dart Express, said while the move to amend the 104-years-old Indian Post Office Act, 1898 was welcome, instead of using it as an instrument to carry out radical and far-reaching reforms, the government was trying to bring in the licence raj.

“Can the Indian Airlines regulate Jet Airwaysor BSNL control Reliance,” he asked, opposing the move to get private players to “register” with the Department of Posts on payment of a Rs 50,000 fee.

According to the bill, an agency can carry postal articles “in accordance with the guidelines”, which remain unspecified, only after registering with the department.

Now, EICI wants the government to define what is within the postal monopoly and what is not. With the cost to move a postal article estimated at Rs 5 for the DoP, the industry suggests that anyone charging more than four times the amount (above Rs 20) should be counted as an outsider.

Also, while the DoP will have the power to refuse registration, the proposed law would only provide for communicating the reasons to the applicant. Mr Jani says the terms and conditions under which registration may be refused should also be prescribed in the rules under the law.

According to him, the amendment proposes a “draconian” measure through which suspension or revocation of registration is allowed for “any” act of omission and commission by an agent or servant of the registered body. Usually, similar laws provide for prosecution and imposition of penalties ranging between fine and imprisonment on violators, but “suspension or revocation” of licence is resorted to only if the authorised person (firm or agency) commits a wilful default in doing anything that is expected under the relevant Act or rules.

Mr Jani pointed out that the Amendment did not provide for any appellate body and all appeals against refusal to grant registration or suspension had to be made to the secretary, Department of Posts, who was also the head of the government operator. “That’s a combination of prosecutor and judge, and is against the spirit of liberalisation,” he maintained.

Finally, the Amendment seeks to pull the Department of Posts outside the purview of the Consumer Protection Act 1986, while the courier industry would continue to be under it. When seen in the context of the government-run EMS Speed Post’s growing popularity, this is a blatant anti-competition measure.