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Friday, December 9, 2011

Postal dept stares at Rs.6,000-crore loss, blames managerial failure for sales dip

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.
Source : Financial Express, 9 Dec., 2011


  1. its creation in true sense is to provide service to the people of India without attributing towards the words "loss or profit". When service word is concerned, there is no loss at all, but when business word is concerned there comes a loss or profit.then what we are doing ,service or business!perhaps the real definition is not known to us or anybody else,it is quite trifling matter.But i think we are making loss,is it possible for us to compete with e-mail,SMS age.We are quite traditional and our traditional father/mother should not be expected to dance to the tune of rittik roshan or any dancing girl like madhuri,Aisurya or sonakhi,sounds absurd ! Still they want us to do it . it is unfortunate !hi saroj patra

  2. Postal department has no scheme of its own. It is paying 66.5% to state government on small savings. Instead it could have been an autonomous body. Unfortunately even after 150 years the administration hasn't looked into the real facts of loss. The administration is mainly concentrating on gathering of reports by hook or by crook though no software is full fledged and even short of software and ofcourse acute shortage of staff in post offices. Instead reduce the staff at divisional, regional and circle level administrative side, things will be brighter for the department.