March 22, 2006, New Delhi, Press Release

CUTS has demanded a public debate on the issue of proposed amendment in the Indian Post Office Act, 1898 before it is presented in the Parliament.

The Amendment Bill proposed to be tabled in the current parliamentary session has not been made public and thus there is little consultation. Even the definition of mails below 500gms has not been mentioned in the proposed amendment, copy of which has been obtained by CUTS.

The proposed amendment to create a monopoly for the Post Department to handle all mails below 500gms is a retrograde step. A distinction should be made between ordinary mail and express mail, as prevalent in USA and European countries where a monopoly does exist for the national post offices to carry ordinary mail but express mail can be sent through couriers, where charges are much higher, CUTS has suggested.

Setting up a postal regulator is indeed a welcome move and has been a demand by consumer groups for long, CUTS said. “The courier/express industry in India is not at all regulated with no tariffs or standards at all”.

It is because of sloppy postal services, that many public sector bodies are now using private couriers, rather than relying upon the post office, where deliveries are never assured.

“Such a regulator will regulate the post offices, which too have been rendering sloppy services for long”, asserts CUTS.

On the matter of a USO type of fund to enable the post office to meet the demand of rural areas, CUTS has stated that there is hardly any need to do so because letters to rural areas can continue to be sent through the postal system when the proposed amendment would cover the distinction between the ordinary and express mail.

Further, the post offices works through extra departmental agencies (EDAs) to handle mails in rural areas, and there is nothing which would prevent private couriers to use the same EDAs network.

Regarding the issue of the Post Department running in losses, CUTS has suggested that they should take cue from the Railways and use their huge and valuable real estate to turn themselves into profit-making ventures.

The Post Offices can expand their business to sell and deliver a large number of other services and goods, as is being done in the West. As it stands, the Posts do make money in the savings banking business, while losing money in postal services, CUTS has said.