New Postal Act could deal blow to $2-bn courier sector

Will escalate costs, mandate regulator to check malpractices, set standards

In what could significantly raise the operating cost of corporations and have huge implications for the $2-billion Indian courier sector, as well as for individual consumers, the Department of Posts (DoP) is in advanced stages of proposing amendments to the 100-year Indian Postal Act. The amendments, soon to be moved to Parliament for discussion, will mandate courier companies to charge at least Rs 70 for every non-local courier. This is double the minimum Speed Post rate and significantly higher than what courier companies normally charge for small packets.

The changes, vetted by the law ministry, have also proposed setting up a regulator for the sector on the lines of the Telecom Regulatory Authority of India (Trai). Courier companies will also have to set up a mechanism for "grievance redressal, track and trace facility and compensation", a government official told Business Standard on condition of anonymity. The department feels it is servicing many areas such as delivery of letters at a very subsidised cost under the Universal Service Obligation (USO) mandate. However, private players are cannibalising on it by offering services at an equivalent or much cheaper price.

“In the garb of express services, they are providing services they should not be… By the Indian Postal Act, these areas are sole privileges of the postal department under the reserve area,” said the postal official. The department has been trying to push through these changes for several years, but has always met sectoral opposition. This time, too, companies are crying foul about the provisions, calling these monopolistic and anti-competitive. “This would totally fall foul of the Competition Act,” said Vijay Kumar, chief operating officer, Express Industry Council of India.

The department had asked for stakeholder comments in 2011, promising to put the entire draft of the new Bill online for public review, something which hasn’t happened so far, added Kumar. “It is clear DoP wants to shackle the entire industry for its inefficiencies.” If something like this comes into effect, a majority of the small and medium players in the industry will be wiped out of business, having a huge negative impact on downstream employment, said Kumar.

The department has argued that unlike sectors such as telecom, postal services cannot ask private players to contribute towards the USO fund for a larger good as the sector is too unorganised. Internationally, countries such as the US and the UK provide for certain privileges and reserve an area for the national post organisation to make up for the USO fund, where private players have to necessarily charge certain times the rates offered by the national post administrator, said the postal official.

In the plan, the new Act will define letters as anything under 50g and since it is a monopoly of DoP, private players will have to take a licence to operate in that area. More, they will have to charge a minimum of twice the Speed Post rate, which is Rs 35 for all India minus local delivery. “Even for packages which are above 50g, they will have to charge that minimum rate, otherwise, players will exploit the fact that for a 50g package, they will have to charge Rs 70 and a 51g package can be delivered for Rs 10 or Rs 20.”

But the industry has been countering the argument by saying in all countries which have a price multiple to administer USO, the price multiple is always on the lowest weight slab of the letter segment. “A price multiple will only ensure the overall cost for Indian consumers are pushed up.”

Meanwhile, the department is also working on a postal policy, which is expected to come up in the Cabinet soon for approval. The policy, which states the intent of the government to affect all these changes in the Act, will also include the departments’ plans with respect to e-commerce and its proposed banking foray.

Moreover, the department has identified 4,000-5,000 “fly-by-night” operators and plans to check on the malpractices in the sector by appointing a regulator, who will set some “accountability standards along with making sure that operator is registered and provides a minimum level of service,” the official said. The regulator will be an independent officer appointed by the Union minister for communications and information technology, like in the case of Trai.

Kumar also said the need for licensing and registration will bring the sector back to the licence raj era. “…Several steps backward when the government of India is looking at attracting foreign investments into the sector.”

Highlights of draft Post Office Bill

Couriers can carry letters even within 150 gm and 50 gm (the reserve area for India Post) subject to them charging twice the postal rates for letters and twice the rates for express service.

All operators will require registration for providing any type of courier service.

There is no registration fee or license fee.

But license will be required only for reserve area, USO and letter mail of any courier service in India, who shall be called a Registered Courier.

Licensing conditions involve adherence to quality, guarantee relief to customers in case of any deficiency in service and commitment to ensure confidentiality and security of letter.

An Appellate Authority is proposed for redressal of grievances of any person aggrieved by an order of Registration Authority.

No plan to raise retirement age to 62 years: Government

PTI | Sep 27, 2013, 05.49 PM IST

NEW DELHI: The government on Friday made it "very clear" that there is no plan to raise retirement age of Central government employees to 62 years from the existing 60.

"At present, there is no thinking in the government for increasing the retirement age. That I would like to make it very clear," minister of state for personnel V Narayanasamy told reporters during a press conference.

There are about 50 lakh central government employees in various departments across the country.

Recent media reports had claimed that the ministry of personnel was working on a proposal to increase the age of service by two years as part of government's plan to defer payouts in the form of pensions and other payments to check fiscal deficit.

It was also speculated that the move may be timed ahead of Lok Sabha elections due next year.

The retirement age for a majority of central government employees is 60 years. However, the age for retirement in case of teachers and scientists is 62 years.

The age of superannuation varies in state governments with majority of them keeping it at 60 years.

The Centre had in 1998 raised the retirement age of its employees to 60 from 58 years.

General Secretary's Visit to Directorate New Delhi An Update ..

General Secretary, CHQ President, CHQ Treasurer, CHQ OGS-II and CS WB Circle visited Postal Directorate from 23^rd September 2013 to 25^th September 2013 and met with Member (Personnel), DDG (P), DDG (Estt), Secretary Postal Services Board, Director (Estt), Director (Staff), OSD to Secretary (Posts) and also to concerned ADGs/SOs. During the course of meetings, following pending issues were discussed in detail and present status is noted against each.  

Sl. No.		Issues discussed	Present status
1		DPC for the promotion to the PS Gr. B cadre for the vacancies of 2013-14 and repatriation of PS Gr. B officers to their home circle	DPC work was completed on 23/9/2013. 148 officers said to be promoted to PS Gr. B cadre. List of selected officers and their circle allotment is expected on 27/9/2013. It was told that as far as possible selected officers will be allotted to their home circle after considering the genuine repatriation cases. Excess officers will be allotted in neighboring circles only.  Department is deciding to introduce new policy on repatriation cases.
2		Issue of combined seniority list of Inspector Posts cadre.	The work of preparation of seniority list of Inspector Posts of 1998, 1999 and 2000 batches have almost completed and is likely to be circulated very soon.
3		Inter Circle Rule 38 transfer cases of Inspector Posts	CPMsG of concerned circles are competent to decide the cases on merit and against the vacancies.
4		Clarification on merger of Inspector Posts and Assistant Superintendents Posts Cadre.	This issue was discussed in length with Member (P), Secretary PSB, DDG (Estt) and Director (Estt). Association told that decision taken in the last AIC was already been communicated to administration. All the representatives of the Association have taken active part in the discussion. It was told that Administration is not in favour to retain the Gazetted status if ASP is merged with IP, as in other department Inspectors are not Gazetted.  After long discussion administration has directed the Association to submit fresh proposal which will be examined once again to settle this long pending issue, as this is linked up with cadre re-structuring, submission of report to ensuing seventh pay commission etc.
5	Merger/de-merger of IPO / IRM Cadre and minimum working experience about Postal / RMS Wing before promotion to ASP / Supdt. Cadre		Revised orders are likely to be issued very soon.
6	Non implementation of MACP Scheme for IPs / ASPs cadre in true spirit		Instructions will be reiterated to all concerned.
7	Filling up of vacant posts of HSG-I (IP Line) cadre		Issue is being referred to DoPT.
8	Regarding non maintaining uniformity by Circles in making Adhoc Promotion of ASPs to PS Gr. B cadre.		Report is called for from concerned circle and instructions issued.
9	Identification of Posts of HSG-I(IP Line) for Postmaster Grade III in Karnataka Circle		Issue is under process and suitable instructions are likely to be issued early to Karnataka Circle.
10	Request for grant of GP Rs. 5400/- to the ASPs after completion of 4 years of regular service in GP of Rs. 4800/- earned under MACP Scheme		This issue is under examination at Directorate only. Association requested to take up with the appropriate authority for justice.
11	Quota of General Line in PS Gr. B Examination		Preparation of fresh Recruitment Rules stopped for want of few creation memos of PS Gr. B posts. It was told that at the time of framing new RRs only 3% quota will be given to General Line in PS Gr. B examination and some relaxation will be given in eligibility. Sr. PM examination will be not conducted due to CAT cases.
12	Recruitment Rules for the post of Assistant Manager in MMS		This is under preparation and will take some time, as information from few circles is awaited.
13	Non convening of DPC for the promotion to Dy. Manager MMS		It will be held within 1 or 2 months.
14	Convening of DPC for promotion to JTS Gr. A cadre		It will take at least two months. First, DPC will be held only for the year 2012-13 and thereafter it will be held for the year 2013-14.
16	Revision of monetary ceiling of briefcase / ladies purse for official purpose		It is told that the issue will be looked into with positive views.
17	Minutes of meeting taken by Member (P) regarding restructuring of Inspector Posts cadre		Fresh proposal is called for from Association.
18	Recasting of marks of LDCE for the promotion to the cadre of PS Gr. B examination for year 2012 held on 3/6/2012		As per the latest instructions issued by Directorate, in all 15 representations have been received with different feedbacks on keys displayed on departmental Web site. These representations are yet to be examined. The outcome of CAT cases is also awaited. One fresh OA is said to be received from AP Circle.
19	Holding LDCE for the promotion to the cadre of PS Gr. B for the year 2013		It was told that there is no chance of holding the examination in this year. Association requested to hold the examination every year and while issuing notification sufficient time margin may be given.

It was learnt that department has finalised 6^th cadre review of IPoS officers and kept ready for submission to nodal ministry with a suggestion of up-gradation / creation of few SAG, JAG post and down-gradation/aboliation of few STS/JTS posts.