Privatisation will benefit India Post and also uplift the rural economy
Change is the only thing constant in the world. Ironically though, we have a natural tendency to fear it. The same is true for India Post. Economic liberalisation and the resulting competition has blessed many industries by pummelling the domestic players into shape. However, India Post remains a stark exception to this trend, and there is no doubt that this anomaly has to change very soon. It has become imperative for Indian Post to exploit fully within its limited resources. We proceed to analyse how reforms in Indian Post can bring a paradigm shift in India. Consider this: India’s largest commercial bank, the State Bank of India (SBI) achieved a total turnover of approximately Rs.9 trillion (over $200 billion) with only 10,000 branches and the largest private commercial bank ICICI, with a mere 1308 branches, exceeded the total turnover of Rs.12.10 billion in 2007, whereas Indian Post, with over 1,55,000 branches, remains one of the biggest loss makers among state run giants. Instead of being a pride for the nation, it remains more of a predicament for the country.
The concept of postal services was posted in India as early as 1884, but even after over a century of trials and tribulations, Indian Post is still waiting to take off. Since its inception, Indian Post has launched a variety of services from mail handling to banking, insurance, small savings and remittances and has been of great service to the nation, but in none of these fields has it succeeded as expected. Instead, Indian Post is just another example of the stark failure of some of India’s legacy state-run corporations.
India Post comes under the Department of Post, which is a part of the Ministry of telecommunications and Information Technology. With the economic liberalisation, the Indian telecom sector, which also comes under the same umbrella (under the same Ministry), has seen robust growth thanks to privatisation, while India Post is yet to fire. Thus the IIPM Think Tank proposes that the government corporatise, deregulate, and bring more public-private partnerships into India Post to make it a success.
Change is the only thing constant in the world. Ironically though, we have a natural tendency to fear it. The same is true for India Post. Economic liberalisation and the resulting competition has blessed many industries by pummelling the domestic players into shape. However, India Post remains a stark exception to this trend, and there is no doubt that this anomaly has to change very soon. It has become imperative for Indian Post to exploit fully within its limited resources. We proceed to analyse how reforms in Indian Post can bring a paradigm shift in India. Consider this: India’s largest commercial bank, the State Bank of India (SBI) achieved a total turnover of approximately Rs.9 trillion (over $200 billion) with only 10,000 branches and the largest private commercial bank ICICI, with a mere 1308 branches, exceeded the total turnover of Rs.12.10 billion in 2007, whereas Indian Post, with over 1,55,000 branches, remains one of the biggest loss makers among state run giants. Instead of being a pride for the nation, it remains more of a predicament for the country.
The concept of postal services was posted in India as early as 1884, but even after over a century of trials and tribulations, Indian Post is still waiting to take off. Since its inception, Indian Post has launched a variety of services from mail handling to banking, insurance, small savings and remittances and has been of great service to the nation, but in none of these fields has it succeeded as expected. Instead, Indian Post is just another example of the stark failure of some of India’s legacy state-run corporations.
India Post comes under the Department of Post, which is a part of the Ministry of telecommunications and Information Technology. With the economic liberalisation, the Indian telecom sector, which also comes under the same umbrella (under the same Ministry), has seen robust growth thanks to privatisation, while India Post is yet to fire. Thus the IIPM Think Tank proposes that the government corporatise, deregulate, and bring more public-private partnerships into India Post to make it a success.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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