Postman to shed traditional khaki | india | Hindustan Times
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Postman to shed traditional khaki

The Govt is working on new regulations for postal services under which India Post will turn into a corporation. Will the new look improve India Post's services?

india Updated: Apr 01, 2006 14:10 IST

India's vast postal network, touted as the largest in the world dating back over 150 years, is set to get a comprehensive facelift.

The facelift is part of a drive that will also set guidelines for private courier companies.

The Government is working on new regulations for postal services under which India Post will cease to be a department and made into a corporation on the basis of a report prepared by global consultancy firm KPMG, officials said.

'The friendly neighbourhood postman may also shed his traditional khaki uniform that has been in vogue ever since the Indian Post Office Act was enacted by the British way back in 1854,' a senior communications ministry official said.

'Under the new revamp plan, licences will be made mandatory for existing courier companies and those wishing to enter the business.

The rules will also specify the penalties for misplacing letters and packages,' the official said.

India has a network of 155,669 post offices, of which 89 per cent are in rural areas.

On an average, a post office serves an area of 21.09 square kilometres and a population of 6,585. Some nine billion mails are handled each year.

The communications ministry, according to officials, is currently studying the recommendations of KPMG, which conducted a financial evaluation of the postal department and suggested ways to set it free from government control.

'We are going through the almost 1,000-page report of KPMG. We will soon frame the new regulations and a new law based on the recommendations,' said a senior official.

The new law will not only make courier firms more accountable to consumers but also provide a level playing field for the Indian postal department, which is facing stiff competition while fulfilling social obligations.

'While there is no service guarantee from the private operators due to lack of regulations, Indian Post is facing unfair competition in the market,' another official said.

Private operators may need to service a minimum number of cities or towns and also provide services in rural areas. The new rules may also outline a financial holding structure for foreign companies, officials said.

Though India Post diversified into profit-making ventures like selling units of mutual funds and collection of utility bills at post offices, it spends huge sums of monies for setting up post offices in rural areas that run at a loss.

'Around 80 per cent of post offices in rural areas incur losses and more than 60 per cent of these are facing losses of almost 85 per cent,' an official said.

Changes are also under way since the government plans to sharply prune the doles to the postal department and make it a commercial entity.

'The government will only bear the cost of the social obligation,' the official added.

The KPMG group has made an attempt to put a cost to universal service obligation - on the lines followed in the telecommunications sector and paid by licensees - that will be included as a part of the department's budgetary deficit or loss.

An exercise has also been initiated to review the postal system's structure, the products, processes, and resources, accounting procedures, the pricing structure and the technology requirements, an official said.

'We are exploring how best the postal department can meet the twin challenges of becoming commercially viable while continuing o fulfil the universal service obligation.'