Budget 2025-26: India Post may get funds for tech-driven transformation

In FY25, the Union government had made a budgetary allocation of Rs 250 crore for India Post

The Union Budget 2025-26 may provide an additional financial package to transform India Post into a more customer-centric and 

digitised logistics organisation, according to a government official.

 

At a recent high-level meeting between the ministries of finance and communications, the capital expenditure requirements of India Post came up for discussion, it is learnt. “We will look at all possibilities on this, and the finance ministry may provide additional assistance in the upcoming Budget,” the official said.

 

In the latest Budget (for 2024-25), the Finance Ministry had allocated Rs 25,378 crore for the Department of Post (DoP), Budget documents show. This was a marginal 1.68 per cent lower than the budgetary allocation of Rs 25,814 crore in the preceding Budget for 2023-24. However, this was 21 per cent higher than the allocation of Rs 20,820 crore in 2022-23.

 

The support is expected to help India Post build relevant infrastructure and ensure customer satisfaction through effective services. Without specifying the quantum of assistance, another source said: “India Post's requests have been taken seriously, and the government is optimistic about its growth.’’

 

In the previous Budget, Union Finance Minister Nirmala Sitharaman had announced plans to expand banking services in the northeastern states, stating that the government would open more than 100 branches of India Post Payments Bank in the region.

The India Post Payments Bank (IPPB) was established under the Department of Posts, Ministry of Communication, with 100 per cent equity owned by the Government of India. It was launched in 2018.

 

In the current year, IPPB saw opening of 26.8 million accounts, with 15.6 million (59 per cent) being held by women. Around 77 per cent of the accounts were in rural India.

 

The bank has received mandates from various government agencies, including Employees Provident Fund Organisation, Reserve Bank of India, Department of Telecommunications, Eastern Railways, Kerala State Electricity Board, and Tamil Nadu Trust Ports. IPPB supports multiple government schemes such as MGNREGA, PM Kisan, Pahal, Mukhya Mantri Ladli Behan Yojana, and Mukhyamantri Mazi Ladki Behan Yojana.

 

As against these, the DoP had incurred actual expenditure of Rs 22,015 crore in 2022-23, and a revised expenditure of Rs 24,389 crore in 2023-24. Revenue expenditure constitutes the vast majority of the DoP’s Budget, with Rs 24,115 crore or more than 95 per cent of the funds received by it slated to go towards employee salaries, pensions and other establishment expenses. The remaining Rs 1,262 crore of capital expenditure was mostly earmarked for an IT modernisation programme (Rs 748 crore), and the India Post Payments Bank (Rs 250 crore), among other central schemes.