Trumping BSNL And Air India, India Post Now The Most Loss-Making PSU

The Logical Indian Crew India

April 17th, 2019 / 5:57 PM

Image Credit: Live Mint

India Post claims the top position as the government’s most loss-making PSU (Public Sector Undertaking) trumping BSNL and Air India.  

India Post’s annual deficit (the difference between entity’s expenditures and revenues) is now much higher than the losses incurred by ‘top loss-making’ PSUs like BSNL and Air India, which reported losses of Rs 8,000 crore and Rs 5,340 crore, respectively, in the Financial year (FY) 2017-18. Financial Express suggests that FY19 revenue-expenditure gap is a staggering Rs 15,000 crores.

However, India Post has been facing losses for quite some time now. In FY17 the deficit came up to Rs 11,969.95 crores, almost doubling the FY16 deficit of Rs 6,007.18 crore. 


What are the reasons?

      1. High operating costs

Here’s how much India Post makes on some of its services. This indicates that the PSU is unable to recover the cost of the services let alone think of profit.


Loss-making PSU


        2. Not enough revenue against salary rise

With the Governmental Pay Panels and pay commissions steadily increasing, India post isn’t generating enough to meet the rising salaries.

India post employs a massive 4.33 lakh employees across 1.56 lakh post offices across the country.

Loss-making PSU
Expenditure & revenue of India Post in FY 2018-19 & estimated expenditure & revenue in 2020 | Reported by Financial Express

Is India post obsolete?

The shift to E-mail, Phone calling and private courier services have adversely impacted India post. India post has tried other means of revenue generation too like financial product selling (sovereign gold bond, mutual fund and insurance), passport service delivery, passport related services, railway tickets and Post Shoppes to sell consumer products. These initiatives, however, generated only Rs 844 crore in 2018. The primary revenue contributors in FY17 are Savings Certificates and National Savings Schemes(Rs. 7085.84 crores), and Postage Realised in Cash (Rs.3609.88 crores) against a total of Rs. 11511.00 crores.

The only strength on India Post’s side is its far-reaching network which can be utilised by e-commerce giants like Amazon and Flipkart, however, as of now, the lack of warehousing facilities prevent India Post from fully utilising this strength. 


Also Read: Payment, Pension Woes & Govt’s Alleged Favoritism Towards Reliance Jio Force BSNL Employees To Go On Strike


Contributors

Written by : Janani Janarthanan (Intern)

Edited by : Shraddha Goled

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