MNCs chafe at mail monopoly
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MNCs chafe at mail monopoly

The multi-crore courier firms are sceptical about Govt's move to regulate the industry, writes Anil Anand.

india Updated: May 11, 2006 16:25 IST
Anil Anand
Anil Anand

With the government bent on maintaining its hold on the multi-crore courier industry, multi-national companies operating in India are voicing their reservations.

The firms are sceptical about the government's move to regulate the industry. The provisions of the proposed Bill -- first reported by the Hindustan Times -- to amend the 1898 Indian Post Office Act, in their present form will push up courier costs by 10 per cent, Steven Okun, vice-president (Asia Pacific) of the US-based multi-national United Parcel Service said. He was here to present his firm’s viewpoint to the government.

If the draft legislation is pushed through, ferrying letters up to 300 grams will be the sole domain of Indian Post.

Government sources argue that a certain level of monopoly in postal services is maintained by all countries to ensure postal facilities to the un derprivileged.

"Any relaxation in the exclusive privilege would amount to opening up the mail sector in India," an official of Indian Post said.

The MNCs have objected to the provision that 51 per cent of the paid-up share in such companies should be held by Indian citizens.

They have also problems with the clause that the service providers with an annual turnover of Rs 25 lakh or above will have to contribute 10 per cent of their income to the Universal Services Obligation (USO).

The USO fund is spent to provide equitable postal services throughout the country (read unviable sectors).

Okun, however, argues that state monopoly and USO commitment cannot go hand in hand. Such a mechanism exists nowhere in the world, he argued.

Comparing the Indian and the Chinese approach to postal reforms, Okun hoped that India Post will not seal the issue in a hurry.

The Chinese government has so far issued seven drafts of the proposed legislation and the industry was having a constructive dialogue with them, he said.

World over French govt has monopoly on all letters and postal mail Germany holds monopoly on items up to 600 grams.

First Published: May 11, 2006 16:25 IST