Dismal Post
The department of posts has once again retreated from the edge of an indefinite strike by its employees with the unions giving minister Ram Vilas Paswan time till early July to meet their main demand -- regularisation of three lakh `extra-departmental' employees. What makes matters worse for the government this time is the minister initially adding his voice to the unions' demand. It is reportedly the strong opposition of the Union finance ministry that is standing in the way of the postal services increasing their full time staff strength by as much as 100 per cent overnight! If that were done the department would add Rs 460 crore to its annual working expenses, even as it is already heavily in deficit. In 1998-99, the department ran a deficit of Rs 1590 crore which was quite close to its revenue of Rs 1722 crore. Provisional figures for the last financial year (1999-2000) indicate the same trend with revenue at Rs 1950 crore and deficit at Rs 1740 crore.
Any further worsening of the postal department's finances cannot come at a worse time. Revenue earned from other countries by handling international mail is going down because of the spread of the internet and e-mail. This is also likely to happen to domestic mail when internet penetration becomes significant in India. Interestingly, the postal operations of the major western countries like the US, Britain and Germany continue to post hefty turnovers; they all figure among the Fortune 500 companies. Their bottomline is extremely modest but not written in red like the Indian postal department's. Its immediate aim should be to find new areas of business and new ways of serving customers which have enabled the postal systems in the developed countries to retain high business volumes. In the US private mail and freight services also command significant market share while being far ahead of the government department in profitability.
The Indian post office has in the last five years made an effort to attract what it calls value added services through the efforts of its business development directorate. Revenue from such services today account for 10 per cent of total revenue but it is only Speed Post that has been able to develop any significant volume. What is more serious for the future is that there is no system of assessing traffic and breaking it up under different categories so as to have an idea of different market segments, without which a proper business development strategy cannot be formulated. For example, the ratio of commercial to personal mail is not known. When the CAG's department pointed out that there was a huge discrepancy between the department's assessment of its traffic volume and revenue earned, the department stopped collecting traffic figures. Either traffic was being hugely exaggerated to justify staff strengths or there was massive revenue leakage. Perhaps the most telling commentary is provided by the department's capital budget which in 1998-99 was a minuscule Rs 76 crore. But even this the department could not spend, surrendering Rs 22 crore. In this dismal scenario, it is hardly possible to attract pay more to employees.