First past the post

Confident of success, a new draft of the Act has been prepared by the Department of Posts DoP, which, say its officials, will enforce quality and service standards on the private industry.

India Post already follows many of these standards. 8216;8216;It will also force the private players to go into regions which are far-off and inaccessible, adding to its costs. They cannot keep skimming profits out of the urban and business-center traffic,8217;8217; says DoP Secretary and Postal Services Board Chairman V. Srinivasa Raghavan.

Private Couriers In A Bind

The government8217;s thought process has private couriers in a bind. The Postal Act is also being amended to revise the definition of 8216;8216;letter8217;8217; and 8216;8216;document8217;8217;, which will leave the couriers no room to argue that they only deliver documents, not letters. Next, the post office will have to persuade Parliament that it is in fact 8216;8216;liberalising8217;8217; the postal delivery industry, by allowing private players 8216;8216;legal8217;8217; entry for the first time.

If it succeeds in doing so, it will end up with an exclusive monopoly over letters that weigh up to 300 grams. This weight is at least 40 per cent of the total mail delivery business and is growing rapidly as business and trade activities expand in India.

As a fire-fighting response, the industry has demanded complete privatisation of all postal services. Instead of the DoP8217;s stated goal of keeping the 300 grams and below market within its exclusive domain, a Position Paper drafted by the Express Industry Council of India EICI has said that the Bill is too severe and anti-competitive.

8216;8216;Both India Post and the private courier industry can work together. We are partners, not rivals. The government should try and turn this debate into a win-win advantage for both sides instead of trying to wrest control,8217;8217; says RK Saboo, Chairman, EICI, which represents the largest grouping of private courier players in the country.

8216;8216;The actual opportunity in the mail delivery business can be unleashed by the government only if it takes up total deregulation of postal services and unleashes the efficiency benefits that result,8217;8217; says the courier industry8217;s Position Paper.

There were attempts in the past to bring in amendments to the Postal Regulation Act, which still carries references to 8216;8216;Her majesty8217;s Government8217;8217;, but the courier industry still favours self-regulation instead of the proposed Mail Regulatory and Development Authority MRDA. It also does not want the large players over Rs 25 lakh turnover to share 10 per cent of revenues with India Post. 8216;8216;The DoP8217;s should fund its Universal Service Obligation USO by adopting a more commercial model,8217;8217; says the Position Paper.

The Case For Post

The government8217;s contention is that Speed Post and Express Post, the offerings of India Post, have beaten all expectations and done extremely well despite the private sector8217;s entry in the segment. 8216;8216;Even other segments will do well if India Post gets to compete openly and fairly in the conventional letter delivery business,8217;8217; says Raghavan.

Fact is, a Standing Committee headed by Lok Sabha MP Somnath Chatterji had also suggested in 2002 that the Government should have an 8216;8216;exclusive privilege8217;8217; over the letter delivery business. The only relief is that the proposed amendments do not bring in an area-based taxation system that the Parliamentarian had recommended.

In the meantime, the DoP can think about whether ordinary consumers in urban areas, who are used to the door-to-door services provided by private couriers, will walk down to post offices to deliver the goods. Neither industry, points out an expert, seems to remember that they can both be replaced by e-mail without much trouble. Once digital signatures become the norm, the sub-300 grams letter may be as rare as putting pen to paper.