PMO to prepare roadmap to cut India Post losses
Last year, the finance ministry had advised India Post on taking a host of measures for generating revenue and cut losses.
NEW DELHI: With India Post joining the club of loss-making Public Sector Undertakings, pipping both BSNL and Air India, the Prime Minister’s Office (PMO) has asked for a report from the telecom ministry on this. Last week, India Post had hit headlines after its annual deficit touched Rs 15,000 crore in FY19, up by almost 150 per cent from Rs 6,007 crore in FY16.
“The government is aware of the financial situation at India Post. The PMO has sought a detailed report and will soon do a consultation over improving the financial health of the PSU,” a PMO official told TMS.
Once the report is submitted, the government will prepare a roadmap to pull the firm out of crisis.The loss of India Post is attributed to high cost involved in payment of salaries and allowances to its massive workforce. The cost of payment to its 4.33 lakh employees stood at a staggering Rs 26,400 crore in FY19. This included pension payouts, which is nearly 50 per cent more than the total receipts of Rs 18,000 crore.
“The traditional postal services continue to make loss. The department has diversified into other services, but still saving schemes contribute to 60 per cent of the total revenue,” a senior official from the telecom ministry told this publication.
As per the company’s March 2018 annual report, the total assets under management, including government’s Special Securities and Floating Rate Bonds, rose to Rs 93,068 crore by September 2018 from Rs 25,856 crore in March 2014.
Last year, the finance ministry had advised India Post on taking a host of measures for generating revenue and cut losses. “The Expenditure Finance Committee, which was headed by the expenditure secretary, has directed the postal department to increase user charges on services, hike product prices, utilise manpower in more value-added services and to hive off products and services that are cost-intensive,” a finance ministry official said. The ministry has already hinted that the budget cannot bail out all loss-making firms.