Reinventing India's postal system

INDIA'S POSTAL SYSTEM, the largest in the world, is facing
challenges on many counts. Its revenue deficit, which has been
steadily increasing over the years, shows no signs of restraint.
And, the growing usage of electronic communication has meant that
there is an incursion into what, till some years ago, was its
monopoly: the mail delivery system. It is in this backdrop that the
hike in postal rates is to be seen as yet another attempt to put the
postal system on the track towards self-financing, though to a
limited extent. The hike in rates for a host of inland services
encompasses those that have seen high subsidies. The case of the 25
paise postcard is a case in point which illustrates that even after
the hike, a huge subsidy element remains. The cost of each post
card, worked out a few years ago, stood at Rs. 3.36 and brought in a
revenue of 25 paise, leaving the subsidy at Rs. 3.11. Thus, the
doubling of the charges for this post card to 50 paise should be
seen from the subsidy angle which continues even after the increase:
Rs. 2.86 per card. Moreover, it is the high volume of traffic in
postcards, estimated at 481.5 million annually a couple of years
ago, which is likely to cause heartburn for the average user of such
postal services. Though in income terms, the doubling of the rate to
50 paise should not mean much on individual expenditures, the
rationale behind the hike must be explained in clear terms to the
users, especially as it raises the entry-level cost of using postal
services. Similar would be the case of the other services that have
seen increased levies. While there is a case for moving towards
recovering user-charges to the extent that does not pinch the
commoner's pocket, there is also the need to reduce costs of
operation as well as to take advantage of the rapid developments in
communication technology. Clearly, in a situation of increased pressure on
public finances,
the time has come when the Department of Posts will have to reinvent
its role and restructure its operations in order to remain an
effective provider of an essential service. Increasingly, the
challenge will be to strike a balance between maintaining this
responsibility and emerging as an organisation that stands up to
competition. For, the comfortable days of remaining a total monopoly
service provider and a Government-fed one at that are over. The
working of the Business Development Group since 1996 to provide
premium services such as Speed Post and other facilities should be
evaluated and fine-tuned to meet the present challenges. The
Department should also consider bringing in more innovation in its
services, while retaining and developing its core business
activities which mean a world of difference to the country's
millions. The moves towards non-core but potentially lucrative
activities, which have already begun with the 'DataPost 2001'
service, should continue. The pilot project, which seeks to collect
details of household preferences of consumer brands and sell the
same for a price to corporates or user-agencies, seems a natural
extension given the wide infrastructure and manpower network that
the organisation enjoys. Based on the initial results of this
exercise, other profitable operations could be conceived and
implemented to cross-subsidise the core postal activities. Much of
the success of its ventures into non-postal activities depends on
how the organisation reinvents itself to meet the challenges posed
by the ongoing economic and technological changes. The existing vast
postal infrastructure, built and nurtured over the years, should not
remain static. The Indian postal system, which has its own
historical importance and has successfully attuned itself to change
over the centuries, should not merely remain the world's largest
postal communication system. It is imperative to ensure that it
emerges as the most efficient one as well.
Copyright 2001 Kasturi & Sons Ltd (KSL).
Source: World Reporter (Trade Mark) – Asia Intelligence Wire.THE HINDU,
02nd June 2001