The Sunday Story The Department of Posts is hard at work on a turnaround plan. But is the pace and mode of change enough? Will it succeed anytime soon in re-engineering services to become competitive and increase revenues?

India has the largest postal network in the world. However, in recent years, growing access to inexpensive telephone systems, and options such as e-mail, have reduced popular dependence on the system — and sent the Department of Posts into the red.

Total volumes, both domestic and international, of letters in physical form and parcels, have grown manifold. But much of it has gone to private operators. The DoP’s market share has fallen significantly.

Ranging from exploiting the vast potential of the post office network in rural areas to using information technology and changing the service and product profile, many measures have been adopted to make a turnaround and to bring it out of the red. Indeed, the results have started showing: in the last fiscal, the DoP recorded the sharpest fall in losses in the last decade. Its revenue surged by 13.62 per cent to Rs. 7,910.51 crore, while the expenditure stood at Rs. 13,705.4 crore. Still, the deficit was Rs. 5,794.89 crore.

The government is seeking to achieve the turnaround through a multi-pronged approach. The seven-fold growth in the number of post offices from 23,344 at the time of Independence to 1,54,866 (as on March 31, 2011) is proving to be an asset.

Most of these post offices, 1,39,040 of them (89.78 per cent), are in rural areas, with the remaining 15,826 in urban areas. The network is being used to increase the reach of various social and financial schemes.

The expansion, especially in rural areas, has also been brought about by opening part-time extra-departmental post offices. Post offices now offer mail, retailing, savings bank, life insurance and remittance services, in addition to delivery of social security benefits such as pensions and wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme. As many as 5.59 crore MGNREGS accounts were opened in post offices, and wages amounting to Rs. 7,860 crore was disbursed to beneficiaries during 2011-12 through 98,491 post offices.

On an average, a post office in India serves an area of 21.23 sq km, and a population of 7,814 people. The 5.6 lakh-strong workforce enjoys a special bond with the masses, especially in the interiors.

Financial models are being altered to lower operational costs. In urban areas, franchisee outlets are being opened where it is not possible to open a regular post office.

The DoP launched Project Arrow “to achieve a big increase in both customer satisfaction and employee satisfaction with India Post.” The project seeks to cover 2,500 post offices by March 2012 and 7,500 post offices during the 12th Plan period. It envisages a pan-India network that is flexible enough to support future applications that will ensure greater accountability and productivity through the use of technology and improve working conditions.

The Mail Lighthouse Project was the second major initiative to be undertaken. It seeks to optimise the mail network. The three-year programme was launched in 2010 to optimise the postal network from collection to delivery; standardise processes with focus on significant quality improvement and reduction in network complexity; and to establish a performance culture using key performance indicators and regular reviews. It also aimed to modernise “the look and feel’’ of the postal services and infrastructure.

To streamline its bread-and-butter area of mail operations and improve the quality of mail-related services, the Mail Network Optimisation Project was initiated in March 2010. This involves the standardisation of processes and development of a performance monitoring system.

The operational network for Speed Post and other categories of mail has been restructured.

The DoP intends to computerise all departmental post offices, mail offices, administrative and other offices and establishments, under its Information Technology Modernisation Programme. This also envisages provision of connectivity through Rural ICT solutions to enable electronic networking of nearly 1,29,500 extra-departmental branch post offices.

With 99.26 per cent of the 25,154 departmental post offices having been computerised by March 31, 2012, the DoP is looking to capitalise on this by making post offices the focal point of delivery of social security schemes.

Its revenue share falling in the core area of mail distribution due to the proliferation of courier companies that took away a large part of the business, and the arrival of cheaper and faster communication options of phones and e-mails that have reduced dependence on paper-based communication, the DoP has also taken to the use of technology to face the challenges.

Telecom Minister Kapil Sibal wants the DoP to address the twin challenges of technological modernisation and diversification. He also observed that while GIS mapping, tracking of mails, automation of sorting services and standardisation of parcels is being worked upon, there is a need to re-engineer the postal service to keep it competitive and increase its sources of revenues. The DoP is using technology to reach out to people, Sachin Pilot, Minister of State for Information and Communications, asserts.

The DoP’s road map for the 12th Plan period indicates that the transformation process for making India Post a pivotal player in the area of communications, logistic and governance has started. But the challenge is to make the best of the enviable network of post offices that has been built up and utilise the personnel who know their turf well and who often have a special bond with the people they serve.

But it is bound to be a long haul, and the challenges before the government are quite steep.