Telecom Ministry mulls corporatisation of postal dept

In an effort to streamline revenue of the Department of Post (DoP) and to make it more competitive, the Telecom Ministry plans to corporatise its operations by tying up with private retailers, banks and educational institutions.

By corporatising over 1.5 lakh post offices across the country, the ministry is expecting to improve the quality of services, increase profitability and reduce prices.

"Ministry is looking to corporatise post offices to make each one of them accountable and a profitable venture," a Department of Telecommunications official said.

For quite some time, the DoP has been trudging the down road of irrelevance and mounting losses with about 90% of its expenses going towards salaries of its 4,75,000 employees in 1,55,000 branches.

An important component of corporatisation of the DoP is that the DoT is mulling to make it mandatory for all the 22 zonal heads to generate 20% revenue on year-on-year basis, the official added.

Though DoP will be corporatised, it will be under the control of the government. "IT and Telecom Minister Kapil Sibal will conduct monthly performance review of DoP circles and make it mandatory for all the 22 zonal heads to give 20% revenue year-on-year basis."

Out of the 22 DoP circles, some of them like Chhattisgarh have reported a negative growth of 19%, Jharkhand (18%) and North East (15.9%), whereas Assam (23.7%), Haryana (19.5%), Karnataka (13.5%) and Tamil Nadu (13.9%), recorded positive growth.

Even as DoP has mopped up a revenue of Rs 6,954.09 crore in 2010-2011, a growth of 11% from Rs 6,266.70 crore in 2009-2010, the negative growth rate in some circles has forced them to focus on out-of-the-box solution to script revival story.

The DoP is looking to forge tie-up with banks, insurance agencies, educational institutions and retailers like Hindustan Lever and Reliance Fresh to streamline its delivery services. "The tie-up with banks and retailers will facilitate the organisation [DoP] to garner good revenues," the official said.

"Telecom Ministry is also looking to direct DoP to actively use its wide network coverage to offer government schemes such as NREGA, Unique ID project and educational schemes to percolate down to the intended beneficiaries," the official added.

"Our aim is to provide efficient postal services to the rural poor who still do not have modern banking and retailing facilities and still depend on informal sector for their financial requirements," the official said.

Taking cue from the improved results of some of the BSNL circles after implementation of monthly review, Telecom Ministry, has extended the same strategy for DoP.

Recently, DoT had started reviewing the performance of two state-run loss making telecom services providers -- BSNL and MTNL -- directing them to achieve a growth of 25% year-on-year or else face the music.