New Delhi: Apart from being the most expansive network of delivery for emails and posts, India Post has now added a dubious distinction to its name. It is now India’s biggest loss-making public sector undertaking (PSU) with the gap between its revenues and expenditure touching Rs 15,000 crores in the fiscal year that ended on March 31. The loss incurred by the company is higher than what BSNL and Air India reported at Rs 8,000 crore and Rs 5,340 crore, respectively.
The allowance and pay costs for India Post stood at Rs 16,620 crore against a revenue of Rs 18,000 crore in the financial year 2018-19. According to the PSU, its expenditure on salaries and pensions will be close to Rs 17,451 crore and Rs 10,271 crore respectively in FY20 against projected revenue of Rs 19,203 crore.
As is the situation with all other ailing PSUs, India Post, too, has been trying to grapple with high operating costs and compensation to employees against falling revenues. The company has tried to diversify by venturing into other services like financial product selling, where it sells sovereign gold bonds, mutual fund and insurance, passport service delivery, railway tickets and other similar services.
But it has failed to translate into more revenues for the sick PSU. In 2018, it only accounted for Rs 844 crore in revenues.
“For a universal service like postal service, losses will be there as there are more post offices in the country than bank branches of all commercial banks put together,” an official said. India Post spends Rs 12.15 on each of its postcards but only gets back 50 paise or 4 percent of the cost. The other services also yield far less than what it costs to the company.
How has it been surviving since?
India Post has been primarily dependent on National Savings Schemes and Saving Certificates for most of its revenues. They made up 60 percent of its revenue of Rs 11,511 crore in the fiscal year 2016-17. Experts have often pointed out that the vast postal network owned by India Post can be leveraged by e-commerce companies to get their products to the remotest places in India. However, the lack of warehousing facilities is preventing the plan from taking off for the state-owned company.