The ministry of communications has rejected the proposal made by the Expenditure Reforms Commission to corporatise the postal department and decentralise tariff fixing powers for postal services. The commission had suggested that it could be included in the Indian Post Office (Amendment) Bill, 2002, which was proposed to replace the Indian Post Office Act, 1898.
Ministry sources said the proposal to corporatise the postal department would not be feasible since postal services were heavily subsidised by the government.
"Postal services require Budgetary support. Therefore, corporitisation does not make sense," ministry sources said.
On transferring tariff fixing powers from legislative control to an independent authority, the ministry has said that the suggestion amounts to excessive delegation of powers. "Postal services is a mass product used primarily by the rural masses and therefore tariffs cannot be left to market forces or to a regulator. The government will have to keep the tariffing powers with itself," ministry sources said.
The government has however incorporated two other suggestions made by ERC in the Postal Bill. ERC had suggested providing legal recognition to private couriers and to enhance administrative and financial powers of the Postal Services Board. The Postal Bill 2002 has made provisions to register private courier companies even as the postal department has retained the exclusive privilege for delivering letters.
The Postal Bill is currently awaiting approval from the Parliament. The industry has raised a number of objections to the provisions in the Bill. For instance they are in favour of an independent regulator to govern the postal sector instead of department of post.
Industry had also suggested that the government should be exempted from any liability for loss or delay of letters and consumers should get protection under the MRTP Act.
