List, Leverage and Liberate India Post from Sarkar
Published: 11th January 2015 06:00 AM
It has the largest
reach and touches the lives of Indians across six lakh villages. With
over 1.55 lakh outlets, its branch network is larger than that of all
the scheduled commercial banks which boast of 1.25 lakh branches.
In
the 1830s, it booked journeys/seats on palkis, boats, cart or coach,
carrying mail—and managed/operated dak bungalows and lodges.
In
1877, it offered the value payable parcel service—the early avatar of
the cash on delivery system e-commerce consumers are starry-eyed about.
In 1879, it created the WhatsApp of the times—the post card—for people
to communicate.
By 1880, it was insuring lives. By 1908, it
served 635 of 652 states, was the money transfer agent for 321 treasury
offices across districts and the agency ordinary people trusted to send
money. By 1930, it created the postal order facilitating safe transfer
for traders and travellers and was a fully functional savings bank.
It
could be India’s largest logistics company. It is one of the largest
retailers. With 320 million accounts and over Rs.6 lakh crore in
deposits, India Post is larger than many large banks. It manages PPF
accounts, savings instruments like NSC and KVP for millions and is ergo
one the largest asset management companies. As an aggregator of small
savings, it is among the biggest lenders to the government.
India Post has been there and done that.
Yet,
successive governments refused to recognise the potential—to deploy its
presence, reach and connectivity to deliver inclusion and catalyse
growth. As early as in 2000, I had advocated the idea of India Post as a
corporate conglomerate during the Vajpayee regime. In 2004, as GDP
growth accelerated and India was back on the radar of global investors, I
suggested (http://bit.ly/1DEYnud) the government corporatise India
Post, divest its shares to Indians and institutional investors to raise
funds to leverage its strengths.
Since then, the world has moved on. The US Postal Service has been modernised. The Royal Mail Group of
Britain restructured itself. China Post Group—again restructured for the
modern world owns trucks, railway carriage and aircraft—boasts of
revenues of $58 billion and is ranked 168 on the Fortune 500 list.
Deutsche Post has been turned into a conglomerate with revenues of $75
billion with a market capitalisation of $38 billion and is ranked 110 on
the Fortune 500 list. Japan Post Holdings—corporatised during the
Koizumi regime—boasts of revenues of $152 billion, is ranked 23 on the
Fortune 500 list and is planning to list its financial outfits to
achieve an astonishing market capitalisation of around $ 81 billion.
India Post has the potential to be the flyover that links India and
Bharat. It has the potential to accelerate savings through financial
inclusion—using the KYC of address and the Aadhar number as a
springboard, it could instantly host over 600 million accounts. It can
be the real and virtual market platform for farmers—Amul II—that levels
the asymmetry in distribution of perishables and boosts production to
curb food price inflation. It can deliver both credit and insurance to
small farmers and micro enterprises. It is also the ideal one-stop shop
for government services. Every initiative will drive employment, income
generation and growth.
The principal problem is one of
approach—regime after regime has viewed India Post as a cost centre.
India Post has the potential to be a huge income centre and more
importantly a force multiplier for the economy.
There is hope
though. Finally, it would seem the idea of leveraging the potential of
India Post is on the table. This week, the task force entrusted with
sketching the modernisation of India Post delivered its report to Prime
Minister Narendra Modi.
The good news is that the task force has
in its 181 recommendations suggested everything—well, almost—that we
would want to hear. Under the new architecture, India Post will offer
postal services, host a Post Bank, sell and market financial and
insurance products, partner with e-commerce outfits and be the outlet
for government services.
The worry is that India Post will
continue to be administered by a department. The structure that inhibits
growth/metamorphosis will persist. The experience of Coal India, BSNL,
MTNL or Air-India is hardly inspiring. The migration of India Post will
be delayed, even detained, by the endemic affliction of incrementalism,
of “phased plans” and “pilot projects”.
India Post needs funds to
leverage its reach and credibility. It also needs liberation from the
sarkar. The argument is not about public ownership. It is about
liberating institutions from political pelf, and instituting
professional management. Why not create a national shareholding
trust—that hosts India Post and all PSUs—answerable to Parliament?
Source
:
http://www.newindianexpress.com/columns/shankkar_aiyar/List-Leverage-and-Liberate-India-Post-from-Sarkar/2015/01/11/article2613400.ece
