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Private stamp on postal department recast draft

New Delhi, Dec. 7: The government will develop a credible road-map for the corporatisation of the postal department.

Under the plan, the private sector will be roped in to provide selected postal services. It also involves splitting the tariff-fixing rights from the policy-making functions of the department of posts with the formation of an independent regulatory authority. This would function in much the same way as the regulators for power, telecom and insurance sectors.

The parliamentary standing committee on post is discussing an amendment to the Indian Post Office Act of 1898 to bring about the necessary changes in the organisation.

The task of developing and involving a credible roadmap for the corporatisation of the operational network of the Department of Post within the Tenth Plan is included in the agenda for reforms. However, the government has decided to examine the issue in depth before taking any action. Minister of state for communications and information technology, S.U. Thirunavukkarasar, has assured the Lok Sabha that there is no proposal to bring about a sweeping changes in the existing postal systems. “However, a few policy reforms will be undertaken along with investments to empower the department to compete effectively with other service providers.”

There are 16,537 post offices in urban centres and 1,39,081 in rural areas. About 5,65,922 employees are engaged in the postal network, including 3,03,170 extra departmental employees, primarily in the rural areas.

Industry has already asked the government not to botch up the eventual privatisation of the postal department and that it should learn from the mistakes that were made in the power and telecom sectors.

The industry has suggested that instead of a bill to amend the Indian Post Office Act of 1898, the Act should be replaced altogether. It has suggested that the title of the Bill should be changed to Indian Postal and Express Services (Operation and Regulation) Act, 2002. One of the important issues that will form part of the new act is the proposal to impose a licence fee on the Rs 2900-crore courier industry. The Cabinet approved this last year.

The fee has not been spelt out, but it has the potential to trigger a massive shakeout in the industry, which has 2300 players surviving on sliver-thin margins.

The fee will bring about regulation in a notoriously unregulated market. The bill pending in Parliament proposed an amendment to the 104-year-old Indian Postal Act, which will make it mandatory for the courier companies to get registered with the Department of Post.

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