Tuesday, October 5, 2010


Dear Comrades,

The extract of the published article on the possibilities of Increasing of Tariff by India Post on certain products is reproduced hereunder for your reference.

NEW DELHI: Premium postal services, such as business mails, logistic post and speed post , will get expensive as the government looks for ways to bring down the deficit of the postal department, which is running into thousands of crores.

The department of posts (DoP) is considering a marketbased pricing for many of its products that do not have a social dimension to them to reduce the government subsidy.  “The idea is to have a sustainable costing and pricing mechanism for postal products and services, even as services are kept affordable for the common man,” said a government official in the department of telecommunications and information technology.

The department plans to get the new tariff structure in place before the budget session of Parliament next year and has decided to commission a study by a private consultant to freeze the proposal quickly.  Tariffs for products, such as post cards and inland letters, that are used by the poor are not likely to be raised.

Post cards are currently priced at 50 paisa each while an unregistered inland letter costs Rs 2.50, well below what it takes the department of posts to deliver them. 

According to estimates, India Post’s tariff is 70% cheaper for domestic destinations and 30% cheaper for international destinations, when compared to the tariff charged by private courier agencies.  This subsidy is largely the reason for widening deficit of the postal department, which is met from the government’s budget.

As per estimates, the department is expected to generate revenues of Rs 6,956 crore, way below its estimated working expenses of more than Rs 10,552 crore. There has been a huge expansion of network for India Post over the last few decades, especially in rural areas, but the department has not seen a corresponding increase in its user charges.

5 Oct, 2010, 07.07AM IST, Souvik Sanyal,TNN
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