Postal dept stares at R6,000-crore loss, blames managerial failure for sales dip

Dear Comrades,

New Delhi: With declining snail-mail traffic, dipping revenue and mounting losses, the Indian postal department is struggling to maintain its relevance in the age of internet and emails. According to the figures from India Post, there has been a 30% dip in its revenue from the sale of postage stamps in last four years — from R777 crore in FY08 to R555 crore in FY11. Worse still, the sale of postage stamps has declined in 20 states in the last four years, which translates into nearly 60% of the 154,000 post offices in India.

Sales of postage stamps is considered the benchmark for measuring the popularity and efficiency of India Post. In its own admissions, the postal department has accepted that there had been an overall decline in mail traffic in the last three years. And this comes at a time when the Indian postal department is staring at a revenue loss of around R6,000 crore while its gross expenditure has virtually doubled to around R14,000 crore in the last four years.

In its submissions made to a Parliamentary panel recently, India Post has conceded “negligence” on the part of its officials and termed “managerial failure” for the sharp shortfall in the revenues realised from the sale of postage stamps in the country.

“Regarding ordinary mail, first-class mail, I agree that there has been some negligence for quite some time now. The staff were doing exactly as they wanted. Mainly, I would agree, it was a managerial failure,” a senior postal department official told a Parliamentary panel recently.

According to the latest India Post figures relating to the last three years, sales of postage stamps declined sharply in states such as Gujarat, Maharashtra, Tamil Nadu and Uttarakhand. Sales dropped marginally in states like Bihar, Assam, Himachal Pradesh and Jammu and Kashmir, among others. The only saving grace for the department are the states of Andhra Pradesh and Uttar Pradesh, where the sales of postage stamps saw a healthy growth.

“The decline in postage stamp sales can also be gauged from the shortfall of around 7 crore mail traffic in the last three years. Mail traffic includes both unregistered and registered mail,” said a government official.

As reported by FE in August, the Parliamentary Standing Committee has already pulled up India Post. The panel had directed the department to concentrate on increasing its revenues using all available means, including increasing revenues from the sale of postage stamps.

“The department should pay focused attention on ordinary mail and identify areas where the revenue has been declining,” the panel had said. The postal department has also been told to expand its business activity by adopting aggressive marketing strategy.

While there are over 150,000 post offices operational in the country, there are over 400,000 villages that still do not have a post office.

However, not all is lost for India Post. Its figures indicate the fast-growing popularity of its Speed Post courier service. The revenue contribution of the service to the department has jumped by 45% over the last three years. In 2008-09, Speed Post generated R515 crore in revenue, which grew to R749 crore in 2010-11.

“The traffic for Speed Post and express parcel posts in 2007-08 stood at R18.37 crore which jumped to R28 crore in FY11,” the postal department said. As a result, now the government is aiming to add 40 premium Speed Post delivery centres this financial year.

www.financialexpress.com Friday, Dec 09, 2011 at 0103 hrs IST