P.K. Chatterjee in Calcutta on Friday. A Telegraph picture

Calcutta, April 7: The department of post is seeking an amendment to the Indian Post Office Act, as it has been hit by the twin blow from the private express and courier services companies as well as the government. The private courier firms ate into its age-old monopoly in mail delivery services and the government withdrew the 10 per cent bonus from its popular monthly income scheme.

“We had clocked an income of Rs 22,000 crore in 2004-05 and set a target of Rs 27,000 crore for 2005-06. But the withdrawal of the 10 per cent bonus from the post office monthly savings scheme has significantly reduced our small savings business in February and March, so much so that I don’t expect the figure to cross Rs 25,000 crore,” said P.K. Chatterjee, chief postmaster general, Bengal Circle, department of post.

But what is bothering Chatterjee more is that the postal department is rapidly losing business to private courier and express services companies.

“They are undercutting us and yet they are not obliged to provide universal services like us. We are not against private courier and express companies, but we need a regulator so that there are some rules of the game,” he added.

“At the time of independence, there were some 30,000 post offices in the country. Now, there are 1,56,000 and out of them 1,20,000 have become unremunerative. In 2004-05 alone, the department of post had suffered a loss of Rs 1,400 crore,” he added.

To circumvent the competition, India Post has introduced several new initiatives and products such as Speed Post, Business Post, E-Post. Also, it is selling mutual funds and other financial instruments.

The Bengal Circle has reported an earnings of Rs 30 crore following the tie-up with Western Union Money Transfer.

“This is a growing business for us as well as the entire department. Our rural postal insurance sales have also gone up. We sold policies worth Rs 578 crore sum assured last year vis-?-vis Rs 70 crore a couple of years ago,” Chatterjee said.

However, “the revenue from these is too little to wipe out the accumulated losses in the near future,” he added.