Sucheta Dalal :Many lost letters and one bad bill
Sucheta Dalal

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Many lost letters and one bad bill  

May 7, 2007

 The Indian Post Office (Amendment) Bill 2007 is one of the UPA’s regressive actions that is bound to trigger needless protests before the government pays attention to those who will be worst affected by its actions—the people. It is true that the postal system desperately needs a revamp and struggles valiantly with a bloated workforce, a clutch of underpriced services, restrictive red tape and a growing population and economy. But the solution is worse than the problem.

The starting point of the amendment itself is bizarre. All mail weighing under 300 gm is already a monopoly of the postal department; yet the government watched silently for nearly two decades as the private courier business grew illegally and took over a large chunk of this market. Instead of letting the postal system leverage its infrastructure and grasp new opportunities, the government is tinkering with the failed monopoly regulation and trying to pass it off as liberalisation.

What if private courier operations continue to flout the law after the Bill is passed? There is no clarity on enforcement or how a monopoly at the bottom of the pyramid will make the postal system more profitable. In its current form, the Bill only hurts consumers by banning private courier operators from carrying articles weighing less than 150 gm except at five-times the current fee. In fact, the mandatory 500% price hike will benefit courier companies by allowing them to grab the cream of the business and thrive under a government mandate to charge extortionist fees. At a time when hiring and retaining labour is increasingly more difficult, the rule could benefit large operators; that is probably why their opposition to the Bill is so muted.

The entire process of amending the Postal Bill completely ignores users. Interestingly, most of us admire the Indian postal service, despite the occasional horror stories about lost and delayed letters. I have missed meetings because a Speed Post from a government office reached after the meeting. But these are rare blips in a large network.

A dipstick survey conducted among acquaintances and activists reveals a surprisingly high level of dissatisfaction with courier services as well. I once faced the embarrassment of a courier delivery-boy stealing a visitor’s footwear. Identifying the culprit only caused us to tighten entry norms to the building. Many people complain about the security hazard from unknown delivery boys ringing doorbells at all hours of the day to demand signatures and acknowledgement for what often turns out to be junk mail. There are many complaints about officious and rude demands for identification by those delivering credit cards and even cheque-books and bank statements. All this is a growing irritant, and ironically, bigger companies such as Blue Dart are the worst offenders. In their zeal to ensure the best service to their corporate customers, they have no qualms about offending recipients—it is something that companies who use courier services would do well to remember. They also hassle working persons by delaying deliveries only because they insist on disregarding even written delivery instructions.

India’s rapid economic growth has mainly been due to the dismantling of government controls. An attempt to reintroduce monopolistic pricing must be strongly opposed. At the same time, there is a need to bring courier agencies within the purview of regulation
Clearly, private couriers could do with some rules and regulation too. But the statutory amendment can hardly ensure the monitoring of millions of letters going out everyday. In fact, the restrictions and price-fixing by the government will create a profitable business opportunity for hundreds of tiny and unreliable courier operations that will fly below any regulatory radar. Moreover, large companies can sidestep the rules by entering into annual contracts with courier companies where the pricing is not based on individual letters. If that happens, the price hike will only hurt small businesses or individuals who will have to pay five times more if they want faster and more reliable delivery. What is worse, any attempt at rigorous enforcement of the postal monopoly is bound to open the doors to bribes, corruption, raids and fines.

The postal department does indeed undertake a lot of thankless work and is forced to provide services below cost for bookpost and the like. The answer may lie in some form of a universal service obligation fund, not price-fixing. The postal department is well placed to use its geographical reach very profitably, provided the government allows it to function freely instead of smothering it further.

Those who mooted the amendments have cited examples of Australia and Germany where differential tariffs were introduced when the postal department gave up its monopoly. But the comparisons are irrelevant without taking into account demographics, per capita income and the fact that the government turned a blind eye to a whole illegal industry flourishing for so long, thanks to the postal department’s sloth. After all, no business will pay more if the postal department is doing its job, ensuring swift deliveries with a reliable audit trail.

India’s rapid economic growth has mainly been due to the dismantling of government controls. An attempt to reintroduce monopolistic pricing must be strongly opposed. At the same time, there is a need to bring courier agencies within the purview of regulation. There have to be rules and standards for private couriers as well, but this point is completely lost in the debate over a bizarre and unworkable Bill.

-- Sucheta Dalal