Sunil Jain: Problem post

Are Indians likely to mail five times as many letters this year as they were expected to last year? That's the question that comes to mind when you see the rise in the deficit for the postal department. From a revenue deficit of Rs 958 crore in the budget estimates for 2008-09, this rose to a whopping Rs 3,825 crore in the revised estimates for the year and an estimated Rs 5,395 crore in 2009-10 budget. It turns out nothing of the sort is happening. The postal department’s receipts fell from a budgeted Rs 6,159 crore in 2008-09 to Rs 5,966 crore in the revised estimates, but this is budgeted to rise again, to Rs 6,136 crore in 2009-10.

The main reason for the rise in revenue expenditures, the budget documents show, is the hike in salaries of the 4.8 lakh staffers of the postal department. From an estimated Rs 4,650 crore in 2007-08, staff costs rose Rs 2,000-odd crore to Rs 6,711 crore in 2008-09 — in 2009-10, these are budgeted to rise another Rs 1,300-odd crore to Rs 8,018 crore. In other words, while salaries continue to rise, it will be a while before the post office starts to benefit from the increased computerisation and all India Post’s plans to offer new services.