Why Corporatization of India Post ?
= Bruhaspati Samal =
Circle Secretary, AIPEU, Group-C &
Leader, RJCM (Staff Side), Odisha Circle
To begin with, we would like to recall the statement recorded in theMinute dated 30th December, 1851 of Lord Dalhousie, said to be the father of India Post as follows.
“It makes the Post Office what under any other system it never can be the unrestricted means of diffusing knowledge, extending commerce and promoting in every way the social and intellectual improvement of the people”
To prove this statement, honestly, if one asks about an organization which serves India, the land of heterogeneous racial, lingual, religious, and social culture upholding its rich cultural heritage through religious pluralism with Hindus, Muslims, Sikhs, Christians, Budhists, Jains etc. sharing their sorrows and happiness in more than 19500 mother tongues inclusive of 22 scheduled languages and protects the national unity, social cohesion, secular and federal structure and democratic ethos, certainly, the name of India Post automatically comes to mind.
Competently assisting the rulers, elite and mercantile community in its various forms in ancient and medieval times, it has conveniently served both the British rulers and general public in modern times as a forceful organization in raising national and political consciousness long before the times of eMail and mobile phones. Prior to independence, India Post, through a limited work force could be able to develop a vast network of communication even before the Railways and Telephones were introduced with wide spread impact on the socio-economic life of the nation through efficient and prompt service. From 23,344 post offices primarily opened in urban areas, India Post has registered nearly a seven fold growth during the period of last seven decades with 1.55 lakh post offices focusing its expansion to rural areas and thus has been acknowledged as the largest postal network of the world providing postal facilities within reach of every citizen in the country at affordable prices adopting every mode of transmission from bare foot to air route.
But the days are gone. Passing through ages, India Post has never remained as a service Department. While it is providing poor man’s service like post cards etc. on subsidized rate on one hand, it is charging the corporate sector in commercial rates on the other and earning revenue to meet its own expenses by running other products and services, both postal and non-postal for the common man. Due to emergence of electronic alternatives, more demanding customers, presence of organized / unorganized couriers for mail conveyance, financial players like banks and insurance companies and above all the challenges of globalization, corporatization and liberalization, India Post is now facing competition which has compelled it to be commercial day by day rather than remaining as a full public utility service department. Thus, to meet the challenges and to face the competitors on one hand and to prove itself as an efficient and reliable communication network as the main component of the communication infrastructure for playing a crucial role in the socio-economic development and integration of the country on the other, the Postal department is doing a lot of things other than just delivering letters aiming for a transformation with re-engineering of Business Processes and making it compatible to suit the new ICT solutions and evolving new processes based on customer needs. It was not an easy task to change this 165 years old organization having 1.55 lakh Post Offices with 3 tire system (Branch Post Office, Sub Post Office / Mukhya Dak Ghar and Head Post Office / General Post Office) overnight. But the employees could do it. Without the help of any professionals, the Postal Assistants with same pay and without any additional remuneration / promotion could be able to implement the I T modernization Project, 2012 successfully. The staff members are quite committed and keep such ability to shoulder any responsibility which cannot be shouldered by any other official in the equivalent cadre in any other Central Govt. establishment.
It is worth mentioning here that due to the sincere and devoted team efforts of its employees, particularly those working at the grass root level, India Post could be able to implement all the plans and policies of the Govt. successfully to rise to the expectations of its customers and stakeholders which resulted to win the Prime Minister’s Award for Excellence in Public Administration for the year 2008-09 for its outstanding initiative “Project Arrow – Transforming India Post”. It also won Silver Medal for outstanding performance in Citizen Centric Service Delivery under Mail Network Optimization Project in the 16th National Conference on eGovernance held in New Delhi from 11thto 12th February, 2013. And later, we started performing better for which thePostal Services beat the revenue targets three years in a row. "The revenue generation of Postal Services is increasing every year and the targets for each coming year are raised by the Government," Minister of Communications and IT Shri Ravi Shankar Prasad said in a written reply to the Lok Sabha on 7th July, 2014. The government had set a revenue target of Rs 7,522.02 crore for the Postal Services in 2011-12, while the Department registered revenue of Rs 7,899.40 crore.In the year 2012-13, the revenue stood at Rs 9,366.50 crore against a target of Rs 8,762.75 crore and in 2013-14, the revenue stood at Rs 10,720.94 crore as against the target of Rs 9,787.52 crore.
Thus, when everything was / is running smoothly and the India Post family was / is trying its best to come out of the deficits, the sudden move of the Govt. in 2014 to corporatize India Post was not understood. A question arises, whether corporatization of India Post is the only way out to make good the deficit and convert this largest central Govt. establishment into a profit making organization!
To us, the answer is straightway ‘No’. Before we justify our answer, we would like to compare the recommendations of Task Force Committee on Leveraging the Post Office Network with that of United States Postal Services (USPS).
Task Force Committee - India Post:
Soon after BJP led NDA Govt. came to power in 2014, a high power committee named as Task Force on Leveraging the Post Office Network headed by Shri T.S.R. Subramaian Ex. Cabinet Secretary consisting 8 other members having expertise in other fields was appointed which submitted its report in Novemeber-2014 recommending to divide India Post in to six units. i.e. (i) Banking and financial services (ii) Insurance (PLI/RPLI), (iii) Distribution of third party products (Services on behalf of private parties on payment basis), (iv) Management of Govt. services (v) Parcel & Packets and (vi) communication delivery. The first five units were designated as Strategic Business Units and sixth unit was left to deliver mails at subsidized rates. Under Deptt. of Posts, a holding company “India Post (Financial and other services) Corporation” was recommended to be formed. The Corporation would consist of Board of Members and one Chairman from the Board members. All the five separate subsidiary companies would also have separate Boards. In the course of time, Govt. might disinvest its part of holding and new corporation would raise fund from share market and thereafter would also be listed in share market in future. It was stated in the report that five Subsidiary Companies would make profit and contribute to meet the loss of sixth unit. The Task Force Committee also recommended for amendment of Indian Post Office Act 1898 and to bring another Postal Act. “India Post (Financial and other services)” Corporation Act for reorganization of Deptt. of Posts by creating new Corporate Structure.
And in the meantime, the banking and financial sector has been corporatized since 01.09.2018 in the name of India Post Payments Bank Limited as the first PSU under Department of Posts with the Certificate of Incorporation from the Registrar of Companies, Ministry of Corporate Affairs under the Companies Act 2013.
Further as told by Sj. Manoj Sinha, the then Minister Communications to PTI on 09.09.2018 soon after launch of IPPB,“Departments of Posts is now reincarnating itself. After diversifying its business with Parcel Directorate and Payments Bank, the department has decided to set up insurance firm as a Special Business Unit in two years”. And now also, the same intention has been repeated by the new Communication Minister Sj. Ravi Shankar Prasad while addressing the Heads of the Circle Conference concluded recently on 31.07.2019. Thus, soon the Insurance sector (PLI / RPLI) may be brought under another PSU.
Task Force Committee - USPS:
Through an executive order, President Trump also created a Task Force in 2018 for overhauling the U.S. Postal Service and the report submitted by the said Task Force drew a tepid response from lawmakers as the agency’s own leadership rejected many of the key proposals. The task force grounded its recommendations in three principles:
- The Postal Service should “continue as a government entity”
- USPS “requires a fundamentally new business model”
- Postal reform shouldn’t “shift costs or risks” to the taxpayer or the Treasury.
As per a report published inwww.govexec.com on 12th March, 2019,one key area of disagreement between the administration’s recommendations and lawmakers’ vision for the agency surrounded the future of collective bargaining at the mailing agency. Trump’s postal task force, which he created through executive order last year, proposed the Postal Service join the rest of government in not allowing its employees to negotiate over pay. Multiple members of the Senate Homeland Security and Governmental Affairs Committee rejected that suggestion, while David Williams, a recently sworn-in member of the agency’s board of governors, said he could think of “no way at all” such an approach would address the most significant drivers of USPS’s precarious financial situation.
All parties at the hearing demonstrated some overlap over their thinking on postal issues. They agreed USPS is in dire financial straits and in desperate need of reform, but it should remain a government agency. The Task Force also declined to recommend privatization. Still, members of both parties raised concerns about the report. Republican senators speculated that a recommendation to create far fewer constraints for “commercial” mail would disproportionately lead to higher costs for rural constituencies. Members of both parties requested more insight into the analyses that went into the task force’s recommendations and suggested the administration failed to use proper models. Williams, the USPS board member, said, “The role of a public infrastructure is not to maximize profit, but to maximize value to our American supply chains and to citizens, especially those in rural and underserved urban areas.”
Gary Grippo, the Treasury Department’s deputy assistant secretary for public finance and one of the leaders of the Postal Task Force, said that his group had no interest in closing post offices, ending service to all addresses in the country or charging disparate rates based for rural customers. He also clarified that the task doesn’t recommend closing post offices, reducing service in rural parts of the United States or charging more for delivery in rural areas. “The task force strongly believes that any potential solution should not disadvantage rural or remote locations,” Grippo said, calling the Postal Service delivery’s network to every address “a national asset and part of our nation’s critical infrastructure.” Grippo also argued that essential activities, such as person-to-person correspondence or package delivery, as well as pharmaceutical delivery, should continue to receive government-protected lower rates.
The Treasury officials and task force members also broke with lawmakers and postal leadership in recommending the Postal Service not take on any new business unrelated to its “core competencies.” Weichert, lawmakers from both parties and others such as Robert Taub, chairman of the Postal Regulatory Commission said the administration, in conjunction with Congress, should more clearly define what the Universal Service Obligation to deliver to all addresses means in the 21stcentury and better explain what services would qualify as essential.
Brief Comparison- India Post Vrs.USPS:
Comparison between India Post & USPS (2017-18) (Current data may vary)
Particulars
|
India Post
|
USPS
|
No. of Post Offices
|
154965
|
31324
|
Net Loss
|
Rs.11969.95 Crores
|
Rs. 26895.57 Crores
|
Loss per Post Office
|
Rs. 7,72,429.25
|
Rs. 85,86,250.16
|
No. of employees
|
433417
|
634447
|
Loss per employee
|
Rs.276176.29
|
Rs.423921.46
|
Letter boxes
|
485438
|
143000
|
Decline in mail Volume
|
0.83 Crore pieces
|
320 Crore pieces
|
A developed country like America is considering to keep the independence of USPS as a Govt. entity even when the loss per employee and the same per post office are higher than that of India Post. Can’t we think the same status for this, largest postal network of the world?
To conclude, it can only be said that since India Post has occupied the nervous system which transmits the words and thoughts of the nation, its significance can be better understood by visualizing its absence. It has already won the trust of 130 crore Indians and it has the ability to serve the entire nation with due honour to our Hon’ble prime Minister’s slogan “SABKA SAATH, SABKA BIKAS, SABKA BISWAS”. To us, no other Central Govt. establishment can touch the heart and soul of every Indian the way India Post has touched. All stakeholders should work consistently so that the existence of this vast organization may not be jeopardized.
The present Govt. has a noble vision to rebuild India achieving Five Trillion Dollar Economy by 2024 in spite of so many challenges on national / international issues related to economy, commerce, social and financial. Communication and Information Technology will certainly play its vital role in all these aspects to contribute to this National Ambition.
Lastly, we would like to say that regime after regime has viewed India Post as a cost centre. But, India Post has the potential to be a huge income centre and more importantly a force multiplier for the economy. India Post has the potential to be the flyover that links India and Bharat. It has the potential to accelerate savings through financial inclusion. It can be the real and virtual market platform for farmers. It can deliver both credit and insurance to small farmers and micro enterprises. It is also the ideal one-stop shop for government services. Every initiative will drive employment, income generation and growth.
To us, this can happen not by corporatization but allowing freedom and flexibility to the Postal Department with a separate Ministry as Ministry of Posts so that it could restructure itself and operate competently with functional autonomy and financial independence having a separate budget and control by the Department of Posts
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