New Regulatory body to fix postal rates

New regulator on the cards for India Post and private courier firms would fix the tariffs for their services.

The government has comprehensively re-drafted an earlier Bill on postal regulation with a view to bringing the entire communication industry under a regulatory regime similar to the one for the telecoms sector.

As per the re-drafted Bill —the Post Office and Courier Services Bill, 2010—which was reviewed by FE, the courier firms would need to register themselves with the regulator—Postal Regulatory Authority of India (PRAI)— and adhere to a set of guidelines for quality of services framed by it.

The firms will also have to contribute to a Universal Service Obligation Fund (USOF) to enable delivery of postal services to financially unviable areas at affordable rates. However, the government has dropped the controversial provision in the original (2006) draft of the Bill which sought to bar private courier firms from carrying packets weighing below 500 gm. Also, in a departure from the original draft, which specified the fee structure for the players, the new Bill has left such matters for the regulator to decide.

The size of the Indian courier industry is over Rs 4,000 crore with major players being DHL, FedEx India and DTDC. As per the latest proposal, PRAI will have functions similar to that of telecom regulator Trai. It can suo motu recommend to the government policy measures on the entire gamut of the postal sector. On its part, the government can seek its recommendations on issues of importance. Once PRAI is constituted, all existing courier firms would have to register themselves with it for a 10-year period on payment of a fee.

The registration, of course, can be renewed once it expires. The regulator would set eligibility criteria for those wanting to enter the sector in the new regulated regime.

It would have powers to recommend to the government revocation of licenses of any firm which fails to meet the criteria set out by it. The government (read the department of post and a reinforced Postal Board) would retain the powers to make policies and provide licences.

A Postal Dispute Settlement and Appellate Tribunal would be set up to arbitrate on disputes between the industry and the regulator, the regulator and the government, industry and the government; and between industry players. Source:Financialexpress.com