New Delhi: India’s department of posts has proposed to raise tariffs for most of its services, including Speed Post, money orders, postcards and inland letters, by 15-20% for the first time in 10 years to cover increased costs of printing and transportation.
The new tariffs are expected to be implemented by April and will generate additional revenue of Rs. 1,000 crore for the department, according to two department of posts officials, who declined to be named.
“The last time the rates were increased was in 2002. Since then, the cost of printing and transportation has gone up significantly; the tariffs need to be hiked significantly,” one of them said.
The proposal has been approved by the seven-member Postal Commission that decides on policies. The Postal Commission is headed by the secretary of the department of posts. The commission has approved the tariff increases and has forwarded the proposal to Sachin Pilot, junior minister in the ministry of communications and information technology, for approval.
The increase in tariff for Speed Post can be implemented once the minister approves it. Hikes in tariff for the most of the other services need a change in the Postal Act.
The postal department has been running at a loss for a number of years. Its deficit widened to Rs. 5,632.46 crore in the year ended 31 March 2010 from Rs. 3,593.09 crore the previous year, Gurudas Kamat, a former minister of state for communications and information technology, had told Parliament in reply to a question.
The latest deficit numbers were not available.
The deficit had increased substantially because of an increase in salaries and pension because of the implementation of Sixth Pay Commission.
“The main reason (for the deficit) is that the rates of most of the postal services do not reflect the market price as they are subsidized to make them within the reach of common man and to the remotest area of the country,” Kamat had said.
In recent years, the postal department has started a number of services—including ePost, railway ticket vending and the sale of gold coins—to increase revenue and stay relevant in the age of email.
EPost is a hybrid mail service through which as many as 992,000 messages were sent until November, earning the department Rs. 81.07 lakh. Between January and October 2011, it earned Rs. 2.04 crore as commission by selling 1.37 million railway tickets through post offices, and Rs. 6.25 crore by selling 591.4kg of gold coins in 2011.
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