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Governance: Govt trying to restrict courier companies




We always believe in the concept of ‘customer is king’; this also implies that subject to conditions of state security, the Government should not take any measures that compromises on the choices available to consumers. Now, what does one make of Government attempts to protect the Indian Postal Department from the courier companies through imposing severe conditions on the courier companies. People make a decision to select courier companies vs. post offices depending on the convenience and cost. One major factor could be the willingness of courier companies to be much more flexible, including regular pickups of the required articles from the premises of the person wanting to send the letter or material. On the other hand, the Postal Department is more useful for its wide coverage, but not necessarily for its flexibility and convenience to customers (as many people could testify). Inspite of all these factors, the Government is trying to put in a bill that would limit the courier companies:

This is one mail courier companies would be praying is returned to the sender. A Cabinet note circulated by the department of posts has mooted 49% cap on FDI in courier business. If the proposal goes through, multinationals like Fedex, DHL, UPS and TNT who hold more than 49% in Indian ventures will have to pare stake. The draft of the Indian Post Office (Amendment) Bill has another whammy in store for the private sector.
It proposes to make letters, parcels and packets weighing up to 150 gm the exclusive preserve of India Post. Private players will have to charge 2.5 times the tariff specified by Speed Post to operate in this segment. “The proposal to charge 2.5 times the Speed Post rates is not only unfair competitive advantage being provided to a competitor (India Post), it would also be a unique case not prevalent anywhere in the world. The global practice is to charge a price multiple on the lowest weight slab of the basic postal service offering. In India, it should be on the 20-gm weight of an envelope and not on corresponding weights and on a premium business segment like Speed Post.

It does not make sense to limit the choices available to common citizens in order to protect the postal industry. Just like the introduction of private players in the telecom industry has a multiplier effect on the economy, having multiple choices in the business of letters and other such articles increases efficiency and competitiveness and benefits consumers overall.




1 comment to Governance: Govt trying to restrict courier companies

  • Atomic Kitten

    Hey!…I Googled for nuclear envelope, but found your page about Governance: Govt trying to restrict courier companies…and have to say thanks. nice read.

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