Govt plans to separate India Post's functions

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The government is planning to separate the functions of policy making, regulations and operations of the over 150 year-old Department of Post (DoP).

Sources in Ministry of Communications and IT said Kapil Sibal has asked for setting up a body to oversee the unbundling of DoP's functions.

An independent body named Postal Development Board (PDB) will be responsible for the overall development and governance of the postal sector, they added. The PDB will also draw a road-map for unbundling of postal department functions.

"The idea is to develop Indian postal sector as a full-fledged market, bring in more service providers to enhance employment and contribution to nation's GDP," a senior ministry official said.

A recent review meeting of the entire sector, chaired by Sibal, found that in some European countries' the sector contributes between 0.6-0.9 per cent of their GDP.

However, the contribution of the estimated Rs 15,000-crore Indian Postal sector is much lower. Private players have been demanding unbundling of the department's functions for a level-playing field and growth of the sector.

At present, DoP -- which has around 5 lakh employees -- is the sole body responsible for policy making, regulations and providing postal service.

The over 100-year old Indian Post Office Act, which governs the sector, bars any individual or entity from delivering letter for commercial purpose.

The business of private courier companies is built around delivering documents, parcels and others items which do not fall under the category of 'letter'.

Sibal has asked DoP to create a framework to support small and medium postal operators and new models to encourage entrepreneurship in the sector.

The minister has also instructed DoP to constitute a Postal Advisory Board (PAB) which should have representation from government, industry players, academics and other stakeholders.

The role of PAB will be to provide inputs to PDB on policy matters. PDB will be set up under Secretary (Posts) and will include Secretaries of Department of Economic Affairs, Department of Electronics and Information Technology, Department of Commerce and two members from Postal Services Board.