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October 6, 1997


N Vittal


Is there life after death? Yes. The postal department
can be resurrected if infotech plays Jesus Christ.

The Indian postal department is perhaps the largest in the world. It employs 600,000 people and offers unique services like 'money orders', a system to deliver cash at the payee's address.

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Yet, the postal department is essentially a loss-making service. It is the government's Cinderella department and gets much less resources than it deserves. The perception that the department can't be expected to generate revenue has now led to a situation where 85 per cent of the budget is spent on salaries.

In fact, the department has become a metaphor of do-good socialism. Decades ago, John Kenneth Galbraith described India's socialism as 'post-office socialism'.

But all's not that bleak for India's postal services. For one, it enjoys a better public image than, say, the rich cousin, the Department of Telecommunications, of which it was a part till 1985.

As it approaches the turn of the century, the postal department is making valiant efforts to improve services and business. But most of these endeavours are dwarfed by the sheer size of the problem: There are 150,000 post offices in the country. About 25,000 are departmental sub-post offices. (See Chart 1).

Can information technology save the day?

During the government's Eighth Five-Year Plan period, 2,625 multipurpose counter machines were installed in about 800 post offices. In the Ninth Plan period another 4,900 may be installed. This should cover about 1,000-1,500 post offices. At this rate it may take two or three centuries before the present 150,000 post offices are covered! (See Chart 2).

The same is true of other aspects of postal administration. (See Charts 3 to 8)

This slow pace in adopting information technology could be blamed on the lack of a core team of technical experts within the postal department. The department has to depend on other departments or external assistance for implementing IT projects. This must change.

In this article I propose a bold new vision - the 'Indian Post Vision 2000'. The objective is to ensure that information technology is used in the operation of the Indian post throughout the length and breadth of the country so as to improve services.

IT will ensure that employee productivity of the postal department goes up. The railways have shown that computerisation of the passenger reservation system led to the same staff handling 40 to 50 per cent additional work. A small experiment in the New Delhi Parliament Street Post Office illustrates how by using multipurpose counter machines, the number of counters has fallen from 352 to 273. A saving of 79 counters. In other words, an additional workload of 23 per cent can now be handled by the same staff.

This is just the beginning. The savings will grow exponentially in time. It is in the national interest and in the interest of the economy that the entire postal system rest on information technology.

There is, however, the problem of resources. The postal department is not a corporation and, therefore, will have to depend on budgetary support from the government for any kind of expansion activity. The government's resources are not much and this means that the dream of having a completely computerised postal system will not be realised. I have a 10-point strategy to make the impossible happen:

  1. A deadline is needed. The postal department moves slowly. It needs to be flipped into the fast-forward mode. As part of its initiative to
    Chart 5
    Activity Installed during 8th Plan Planned during 1997-98 Proposed during 9th Plan
    Computerised custom care 7 29 500
    Facilitation counters - 423 4,000
    Track and trace facility 8 - 50
    Booking and delivery 60 - -
    Business offices - - 5
    Premium product cells - 8 40
    Customer care centres - 1 5
    Networking circles with HQs - All -
    become more responsive to the people, the government could declare that the entire postal department has to be computerised by December 31, 2000. That gives us three years.
  2. The government must also declare postal services are infrastructure like power, ports, roads and telecommunications. This will ensure availability of funds at attractive rates from institutions like the Infrastructure Leasing And Financial Services or the Infrastructure Development Finance Corporation. Once funds have been mobilised the government will need to (a) persuade a sea of officers and employees in the department that their jobs are not on the line and shunning tehcnophobia will benefit them beyond their imagination. (b) The technical design of the system
    Chart 6
    Activity Installed during 8th Plan Planned during 1997-98 Proposed during 9th Plan
    VSATs 74 - 200
    ESMOs 265 - 2,000
    HUB - - 1
    from the software and hardware points of view will have to be worked out. A strategic decision must, therefore, be taken to contract out installation and maintenance of the systems. The work could be awarded to private or public sector companies.
  3. The basic idea is that the IT infrastructure for the postal department will be funded and operated essentially by external agencies and not the employees of the postal department. The postal services, of course, will be
    Chart 7
    Activity Installed during 8th Plan Planned during 1997-98 Proposed during 9th Plan
    Rural PLI work - 6 regions Balance 39 regions
    PLI network All circles except J&K and O/o director PLI Calcutta J&K circles and O/o director PLI Calcutta Upgradation of existing system where required
    operated by the employees of the postal department who will use the IT infrastructure which will be kept ready for their use.
  4. Standard hardware and software may be prescribed. As the postal department does not have the required technical manpower, the Department of Electronics can form a separate division to help it. The division could physically place its officers in the postal department. The services of the National Informatics Centre, the Indian Institute of Technology and technical experts from elsewhere, even from the private sector, could be availed of. In the postal department itself, it will be necessary to create an IT brains trust. This can be headed by a member of the board or even the chairman himself. Enthusiastic and committed officers of the department, irrespective of seniority, may be brought into the brains trust. In addition, knowledgeable people from other departments and organisations, who can make their technical expertise available to the postal department must be included. When I was secretary, DoE, in the effort to introduce a money order transmission via VSAT, officers of the DoE were physically placed in the postal department to work in collaboration with the officers there to evolve the system successfully.
  5. The various services of the postal department, for which computers, hardware and software are needed can be contracted out to various companies on standard terms. These terms should include not only provision but also factors like uptime and service quality. In the case of Navodaya Vidyalayas, for instance, a contract was given to a private company to provide not only the teacher but also the hardware to ensure that the teaching of the computers in the CLASS programme (computer literacy in schools) was successful. Similarly, the hardware and software, as well as the servicing of the various systems should be contracted out, nation-wide, to the various computer companies. We can begin with the 25,000 departmental head and sub-post offices. In fact, with 150,000 post offices in the country, there is a tremendous market opportunity and the Indian computer industry should seize it. The government will be able to get the best of terms in this deal. Business, after all is a win-win exercise.
  6. Chart 8
    Activity Installed during 8th Plan Planned during 1997-98 Proposed during 9th Plan
    Administrative offices - Four in directorate Rest of the directorate branches
    Linking circles / Regions with directorate - - All
    Phiately bureaux - 15 252
    DAP offices - 8 All the rest
    Postal stock depots 15 Rest of the PSDs N.A.
    The postal department should acquire these systems on lease from the private parties. Of course, they will be used by the postal staff for operating the services. The lease charges can be substantially brought down if the finance ministry extends concessions under the Income Tax Act such that any investment made in IT systems would be eligible for 100 per cent depreciation in the first year itself. As has happened in the case of wind farms, the leasing companies must be able to provide systems at an interest rate of 12 per cent which will be an attractive rate for the postal department. Incidentally, the leasing system will also avoid the difficulty arising out of the lack of technical manpower in the postal department. It will ensure that the IT systems of the posts never become obsolete because as the technology changes, it should be possible to continually update the hardware and software used in the postal system. After all, it is the private companies who have to provide the systems as specified by the postal department.
  7. The Infrastructure Leasing and Financial Services and the Infrastructure Development Finance Corporation as well as other financing agencies must be able to fund these massive operations.
  8. With the introduction of IT in the postal department, the business opportunities arising in the private sector need not be restricted to the big players though they may dominate in the larger urban areas. When IT comes to smaller areas and villages, perhaps self-employment schemes like the Jawahar Rozgar Yojana and the Prime Minister Rozgar Yojana can be modified to cover educated, computer literate, young technicians and technocrats who can take on contract work. In this way, the effort of applying IT in the postal department will generate additional employment opportunities without draining the government's budget.
  9. We had mentioned earlier that one of the objectives of computerisation is to see that the manpower requirements of the postal department do not go up and additional workload is handed by the same staff. There could be resistance from the unions. Now, this can be overcome by offering the employees of the postal department the option of taking voluntary retirement or even becoming a contractor for the department while retaining their lien in the department for a period of, say, five years. So, as contractors, postal employees can provide the same services which were visualised for the individual technicians under the Jawahar Rozgar Yogjana or the Prime Minister Rozgar Yojana.
  10. Another important technical requirement for the entire postal service is the need for a countrywide reach. The postal department's experience in the VAST money order system shows that they could put up only 74 VSATs and cover a very small percentage of the country. In order to provide nation-wide connectivity, all the private companies as well as government departments which have a telecom infrastructure should be permitted to make their facilities available to the postal department on reasonable terms. In other words, the terms should cover the operating cost for the departments/organisations concerned with a marginal element of profit. Postal service is generally a public service and it can not be a high profit-making service. In this way, for instance the railways can make their communication network available to the postal department. Organisations like NICNET and ERNET of the DoE could also make available their systems so the department. PSEs like ONGC, BHEL and SAIL who have got microwave and other telecom facilities can also make their surplus capacity available. With these network facilities being available to the postal department, it can substantially enhance its reach and cover the whole country very effectively.
A strategy on the above lines will make it possible for India to substantially modernise its postal system and significantly improve its service to the public.

Previous columns: Critical mass | T.R.a.I | Santa Clause 11(2) | The Broadcasting Bill | The death of distance | S.O.S, getting the message out of the bottle | Force 7 from FICCI | Of railroads and info highways | Techno Politics | Cheating death: Ways to resurrect ITI | The HAM-handed miracle | Electronic governance | Which came first? | The four-engine design | Learning to learn | Heads 'n hands

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