Leveraging India Post for rural inclusion

Written by V Sridhar | Updated: Dec 19 2014, 14:30pm hrs
The world over, the postal, telegraph and telephone service (PTT) has been a government-owned monopoly, that too conceived as a natural monopoly in the provisioning of associated services. With the introduction of competition in local access telephony in the US in 1996 and the consequent developments in Europe of breaking up PTTs and separating out telecom from postal services, India also followed suit after the enactment of the Telecom Policy of 1994.

While competition in telecommunication services, using substitutable products, especially in the mobile sector, is giving a difficult time to government operators, the postal department has had a varied path. India Post, with about 1.55 lakh post offices in the country, of which about 1.4 lakh are in the rural areas, remains as the last link for communication services in the country. On an average, a single post office in rural areas covers a population of about 6,000. Though the average distance to be travelled to a postal office in the country is around 2.6 km, in rural areas it is expected to be shorter. Though services such as courier and e-mail are substitutes for services rendered by the post offices in urban areas, they are complimentary to the existing postal systems in rural areas. e-Post is one such service where e-Greetings and documents are handed over to the recipient by postal mail. Couriers in most of the rural areas depend on India Post to complete the last-mile journey of parcels. The mobile money transfer of India Post enables peer-to-peer transfer of money without the need of complex smartphones and the associated apps to anyone in the vicinity of a postal office.

While it lost out its place in urban areas of the country to competing services and providers, India Post still remains a formidable government asset in rural areas. With its brick-and-mortar infrastructure and thousands of gramin dak sevaks (rural postal employees), the government in all its earnest should leverage the physical and human infrastructure of India Post to deliver Digital India to the rural population.

The National Optical Fibre Network (NOFN), with the objective of connecting 2.5 lakh gram panchayats, for most parts should land up inside the post offices in rural areas of the country. The post offices should be empowered to host the Common Service Centres (CSCs) for delivering e-Governance services that complements their existing service offerings. The CSCs connected to the NOFN can doubly act as broadband gateways to the villages. The services can be paid for over-the-counter, much the same way we buy inland letters at the post office. The Universal Service Obligation Fund (USOF), incidentally under the Department of Telecommunications, has not so far touched India Post. In fact, the USOF support for extending the broadband gateway in rural areas shall be extended to India Post, much the same way thousands of crores of rupees are being given to government-owned telcos. Although many expert committees have expressed their opinions on India Post to be leveraged for financial inclusion, the banking licence for India Post was turned down by RBI, due to its currently lost lustre. Whether India Post can perform well as a bank is questionable given that its core strength is not in money management, it can certainly serve as a correspondent for banks to reach rural areas, thereby augmenting financial inclusion.

On its part, India Post needs to become agile in learning to provide new services, especially digital services; do better financial management as it has been losing taxpayers money at the rate of R6,000 crore every year; be aware of changes around itself and adjust its way of working to be customer friendly. All said and done, people, especially in rural areas, tend to trust India Post more than any other substitute services and it is an opportunity that India Post does not want to miss, once again!

By the way, we can proudly say that we have beaten China as there are only about 95,500 post offices in China, much less than that of India Post!

The author is professor, International Institute of Information Technology, Bangalore. Views are personal