NEW DELHI: The sleepy neighbourhood post office building could soon be bursting at the seams, if the government allows India Post to commercially develop its land holdings that house the country’s 1.5 lakh post offices.
The department of post, dependent on the government’s financial assistance for running the world’s largest postal network, has circulated a cabinet note seeking permission to develop its real estate assets with the help of private players to shore up its sagging revenues.
“The plan will help the postal department emerge stronger by benefiting from better facilities and infrastructure developed by private firms,” said an official with the ministry of communications and information technology. The plan, however, is unlikely to have a smooth run. It may face procedural bottlenecks faced by similar attempts by other departments like the Indian Railways. The government-operated postal system currently has an annual deficit of Rs 3,596 crore. It is expected to generate revenues of Rs 6,956 crore, way below its estimated working expenses of more than Rs 10,552 crore. The department is still to work out the modalities of the plan or the operational scope of private partners. But, it is clear that the private businesses that operates from the post office premises would be consistent to the ‘image’ of the department. This means sectors such as retail, financial services or public service delivery are likely to find favour with the department, said the ministry official, who asked not to be named. The proposal is seen by the government as a viable business option, not just because of its ability to reap yields for the government. It will also give private players a great business opportunity.
Indian Railways’ plan to develop it land to create another stream of income is facing delays due to objections raised by local authorities and law enforcing agencies. Its project in New Delhi was opposed by the Delhi Development Authority (DDA) on the grounds that it would create a huge traffic bottleneck. Delhi Police also had reservations against the project.
The department is also working on a plan to introduce pre-paid cards that will support cashless transactions at retail outlets across the country to leverage the cash-handling expertise of 1.5 lakh post offices to generate revenues. The proposed magnetic strip-based cards could be operated at merchant establishments and automated teller machines (ATMs) where cards from VISA, Mastercard and American Express are accepted.
12th May 2010, 0330 hrs IST,Souvik Sanyal,ET Bureau
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