Lok Sabha Question No. 4449 (UNSTARRED), answered on 2016-12-14
Subject: Task Force on Post Offices
Ministry: COMMUNICATIONS
Asked by: BAHADUR SINGH KOLI

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF POSTS

## LOK SABHA UNSTARRED QUESTION NO.4449 TO BE ANSWERED ON 14 TH   DECEMBER, 2016

## TASK FORCE ON POST OFFICES

†4449. SHRI BAHADUR SINGH KOLI:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether  the  Government  has  constituted  any  special  task  force  to  study  the use of post office network in the country;
- (b) if so, the details thereof and the recommendations made by the said task force;
- (c) whether  the  Government's  thrust  is  on  increasing  PIL  business  and  grab  ecommerce bazaar under postal service;
- (d) if so, the details thereof; and
- (e) the action taken in this regard?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

(a) & (b) Yes,  Madam.    A  Task  Force  on  Leveraging  the  Post  Office  Network was  set  up  under  the  Chairmanship  of  Shri  T.  S.  R.  Subramanian,  retired  Cabinet Secretary. The Task Force submitted its recommendations on 4th December, 2014. Recommendations given by the Task Force are at Annexure-A.

(c) to (e) Constant efforts are being made by the Government to increase Postal Life Insurance (PLI)/Rural Postal Life Insurance (RPLI) business. It has also  focused approach to fulfill the needs of eCommerce sector, and thereby increase its revenue receipts.  As  a  part  of  strategy  to  increase  its  market  share  and  revenue,  the Government has rationalized its service offerings. The parcel booking and handling facilities  have  been  upgraded  to  cater  to  the  expanding  eCommerce  market.  The details  of  the  actions  taken  to  increase  the  PLI,  RPLI  and  eCommerce  are  at Annexure-B.

## Annexure-A

ANNEXURE REFERRED TO IN PARTS (a) & (b) IN REPLY TO THE LOK SABHA UNSTARRED QUESTION NO. 4449 TO BE ANSWERED ON 14.12.2016 RAISED BY SHRI BAHADUR SINGH KOLI, MEMBER OF PARLIAMENT REGARDING TASK FORCE ON POST OFFICE.

The Recommendations made by the Task Force in this Report on Leveraging the  Post  Office Network, entitled 'Empowering Rural India' are  enumerated seriatim below, cross-referenced to the relevant paragraphs in the body of the Report.

## Philately

- 1)  Stamp issuance facility, may be extended to include more themes for stamps as well as the introduction of more philately products. (Para 2.13.)

## Hand-Held Mobile Computing Device (MCD)

- 2)  As part of the IT Modernization and Rural ICT Projects, the Task Force wishes to underline that the soft-ware for the Hand Held Mobile Computing Devices to be made available in Branch and rural POs should be versatile and universal, based  on  non-proprietary  and  open  standards,  without  being  locked  to  any vendor or particular operating system. (Para 4.2.4.)

## Mail Operations

- 3)  Some Postal Services (Mail Services like Post Cards) which are considered as falling in the category of essential public services may continue to be provided at subsidized rates as a matter of policy. (Para 8.1.7.)
- 4)  The prices at which all other Postal Services are offered to the public should be periodically reviewed and rationalized so as to bring about a degree of balance with  rising  costs,  general  inflation  and  increasing  incomes  over  time.  (Para 8.1.7.)
- 5)  The  new  technologies  of  electronic  communication  which  have  become available should be harnessed to reduce delivery costs. (Para 8.1.7.)
- 6)  Post  Cards  should  be  scanned  and  transmitted  by  e-mail  to  the  Post  Office nearest to the addressee, printed there and delivered to the addressee, thus saving on the cost of physically transporting the article. (Para 8.1.7.)
- 7)  India Post may conduct a comprehensive study of the viability and feasibility of transmitting  unregistered  mail  through  e-mail  rather  than  through  physical transportation as at present. (Para 8.1.8.)
- 8)  Even where it is considered desirable to continue subsidizing certain services as a matter of policy, prices should not remain unalterable for all time and the extent of subsidy should not remain open-ended. (Para 8.1.9.)
- 9)  Efforts  should  be  made  to  rationalize  the  price  structure  and  reduce  the subsidy  burden  over  time,  particularly  for  those  services  which  are  used  for commercial purposes. (Para 8.1.9.)

- 10)  Government  of  India  may  consider  instituting  a  policy  of  broadly  linking  the price of various mail articles and services to their real cost and to the overall index of inflation defined in a suitable manner. Any exceptions to the general rule should be made on the basis of detailed written justifications and reviewed from time to time. (Para 8.1.10.) ·

## Parcel Services

- 11)  The  parcel services of India Post should be detached from the Departmental structure and spun off into a new corporate entity, which may be designated as India Parcel, or given other suitable name.(Para 9.1.3.)
- 12)  India  Parcel  will  be  an independent Subsidiary Company and will function as an independent profit centre; it will generate and control its own revenue and have the freedom to set its own rates in line with market prices. (Para 9.1.3.)
- 13)  As a Subsidiary Company, India Parcel will have access to the infrastructure of the Department of Posts on a payment basis and will additionally be authorized to  create  new  infrastructure  or  hire  new  staff  as  it  deems  necessary.  (Para 9.1.3.)
- 14)  India  Parcel  could  provide  additional  facilities  such  as  motor  cycles  (or reimbursement  for  motor  cycle  delivery)  to  Postmen  or  offer  them  additional reimbursement / incentives for carrying parcels. (Para 9.1.3.)
- 15)  The  strategic  strengths  of  India  Post  (reach  of  network  and  century  plus experience in delivering mail) should be aggressively leveraged in the growing e-commerce  and  e-retail  market,  particularly  at  the  back-end  of  the  delivery chain in rural areas so that it becomes the premier Pan-India delivery service provider. (Para 9.2.12.)
- 16)  India Post should also leverage its unique strengths to conversely extend the supply  chain  for  products  emanating  from  local  markets  and  rural  areas (ethnic, traditional and artisanal products, handicrafts, etc.,) to all parts of India and even beyond. (Para 9.2.12.)

## E-commerce Services

- 17)  Under  the  IT  Modernization  project,  India  Post  should  seek  to  integrate  its information systems with those of the major e-commerce companies in order to facilitate two-way information exchange. (Para 9.2.16.)
- 18)  India Post should enter into Agreements and Understandings with e-commerce companies and on line retailers to deliver their consignments and collect cash on their behalf. (Para 9.2.16.).
- 19)  To support e-commerce sales, sophisticated logistics and warehouse planning, as well as robust routing and tracking, & security and delivery systems, should be instituted so as to allow the shipper, India Post and the consumer to track the delivery and time line of the parcel on a real- time basis, accessible through any device or channel. (Para 9.2.17)
- 20)  Agreements  or  tie-ups  with  e-commerce  companies  should  include  a  clause which will enable the booking of product delivery through India Post/ Parcel at the  time  the  product  is  purchased  on  the  e-commerce  portal,  so  that  the

customer purchases the product and simultaneously books its delivery through India Parcel. (Para 9.2.18)

- 21)  India  Post  may  seek  to  incorporate  the  above  clause  into  its  existing  MOUs with e-commerce retailers and also incorporate it in MOUs which it may enter into in future. (Para 9.2.18)
- 22)  India  Post  should  set  up  an  e-commerce  Portal  that  allows  manufacturers, SMEs,  village  craftsmen,  offline  retailers,  etc.  to  list  and  sell  their  products. (Para 9.2.19)
- 23)  The India Post portal should, in particular, provide consumers from Tier II and Tier  Ill  cities  access  to  a  catalogue  of  goods  for  sale  in  their  local  language, along  with  ratings  and  reviews,  similar  to  that  offered  by  industry-leading portals today. (Para 9.2.19)
- 24)  Agents  and  advertisers  should  also  be  provided  access  to  this  portal.(Para 9.2.19)
- 25)  The portal should have a payments gateway allowing payments through credit and debit cards, the Post Office Savings Bank and RuPay cards. (Para 9.2.19)
- 26)  Customer interaction and service channels such as Interactive Voice Response (IVR) and Call Centres should be provided as required to support ecommerce activities. (Para 9.2.20)
- 27)  Additionally, a mobile solution should be provided to the end-consumer to track and trace a delivery across the India Parcel system, and to allow scheduling of appointments for delivery of goods and services. (Para 9.2.20)
- 28)  A  robust  road  transport  network  providing  time-bound  delivery,  reliable  intransit security and real time tracking for surface parcels should be instituted. (Para 9.2.21)
- 29)  Road  transport  requirements  for  parcel  delivery  on  both  short-haul  and  longhaul routes may be either outsourced or serviced by India Parcel's own fleet of vehicles, depending on volume and financial viability. (Para 9.2.21)
- 30)  A two-tier hub and spoke network for parcel operations should be conceptualized and put in place, with the location of hubs being determined by the  city's  potential,  volume  of  business,  connectivity,  geography  and  other relevant factors. (Para 9.2.22)
- 31)  Parcel processing facilities should be separated from mail handling units, with appropriate process re-design; taking into account the requirements of automatic, semi-automatic and manual processing. (Para 9.2.22)
- 32)  New equipment, including modern sortation equipment should be procured as required for Parcel Processing Centres. (Para 9.2.22)
- 33)  Infrastructure,  including  buildings,  should  be  upgraded  as  required  based  on the nature and size of the city and the volume of business. (Para 9.2.22)

- 34)  Warehousing  facilities  should  be  created  keeping  in  view  the  expected increase in the volume and range of e-commerce business in the future. (Para 9.2.22)
- 35)  The delivery of parcels should be de-linked from normal postal services and a separate vertical link should be created from the Directorate to the field with a dedicated, nodal and mechanized delivery system. (Para 9.2.23)
- 36)  Parcel Kiosks should be set up at important locations and delivery staff should be equipped with Hand-held Mobile Computing Devices which can immediately register  the  delivery  of  parcels  and  log  them  into  the  tracking  system  in  real time. {Para 9.2.23)
- 37)  Introduction of same day delivery service, return logistics, standard and secure packaging at the booking point are areas where reliable systems need to be put in place. (Para 9.2.23)
- 38)  Strong IT back-end support for\_ ail activities of India Post and its Subsidiaries is critical and could be achieved by tying up with one of the leading Indian IT Companies to develop a world class user-friendly portal. {Para 9.2.25)
- 39)  The portal should provide end-to-end track and trace service with authentication of the loop being completed on the customer receiving delivery, after  sales  service,  key  accounts  management,  Bl  tools  and  API  based integration with e-commerce players, road and rail transport agencies, airlines and other freight forwarders. (Para 9.2.25)
- 40)  A  strong  online  monitoring  system  with  capabilities  to  diagnose  and  resolve issues  on  a  real  time  basis  should  be  put  in  place  with  the  aim  of  providing world class customer services. (Para 9.2.25)
- 41)  A  strong  security  system  should  be  instituted  at  all  levels  of  mail  and  parcel service. (Para 9.2.26)
- 42)  In  particular,  the  security  system  should  ensure  absolute  cyber  security  and payment security. (Para 9.2.26)
- 43)  Security at parcel handling centers should be enhanced through installation of CCTV Cameras with live streaming capabilities, installation of metal detectors, X-ray screening, frisking, etc.(Para 9.2.26)
- 44)  Security in transit should be ensured through GPS tracking and containerized movement of parcels. (Para 9.2.26)
- 45)  Suitable  training  should  be  provided  to  the  security  and  other  personnel  to create awareness and establish protocols of operation and standard operating procedures. (Para 9.2.26)
- 46)  Capital  infusion  to  the  tune  of  Rs.  500  Crores  will  be  required  for  launching Logistics and Parcel, and e- Commerce. (Para 9.2.27)

## Additional Retail & Agency Services

- 47)  An  experimental  project  should  be  started  in  a  few  selected  areas  to  deliver additional services and then gradually extended to other parts of the country. (Para 10.2.2.)
- 48)  The Governments of Andhra Pradesh and Telengana are operating MeeSeva, an IT-based programme under which as many as 342 Services, including both G2C and G2B services, are being facilitated through a single entry portal. India Post can also consider this model. (Paras 10.2.1. to 10.2.2.)
- 49)  This Para contains an Illustrative List of 27 services which could potentially and usefully  be  added  to  the  menu  of  mail  and  parcel  services  currently  being offered by India Post. (Para 10.3.2)

50)  Post Offices can be used as Common Service Centres for:

i. Dissemination of information, including weather warnings, traffic conditions, agricultural extension practices, disease protection and prevention, good health practices, etc. ;

ii. Promotion of digital literacy and distance education;

iii. Sale of railway, airline and road transport tickets; application forms for passports,  driving  licenses;  Stamp  Paper,  Court  Fees  Stamps;  Application, Examination, Name Correction and other Forms;

iv. Collection of electricity, water, telephone and all other bills for Government services;

v. Collection  of  payments  for  e-tailing  goods  and  services  on  behalf  of private service providers;

vi. Promotion of tourism by facilitating dissemination of information, booking of hotels and transport of various kinds;

vii. Delivery of all Government documents, including Aadhar cards, Voter ID cards, Driving Licenses, Birth, Marriage and Death certificates, Land records, etc.;

viii. Acceptance of challans and school and university fees;

ix.  Sale of life, crop, accident and other types of insurance;

x. Collection  and  compilation  of  data  on  electricity  services,  quality  of infrastructure;

xi. Collection and dissemination of grass-roots innovations and outstanding, functional traditional knowledge practices.

xii. Conversion of POs to Disaster Management Centres in case of need.

xiii. e-Education and e-Healthcare, as these areas develop in future.

(Para 10.3.2)

- 51)  The  Department  of  Posts  may  consider  whether  it  would  be  feasible  to  add some of  these  services,  as  well  as  some  of  the  342  services  being  offered through the MeeSevaprogramme in to its existing bouquet of services. (Para 10.3.2)

- 52)  Appropriate systemic checks and balances should be instituted, implemented and monitored on a continuous basis. (Para 10.3.3)
- 53)  Pilot  projects  may  be  implemented  in  selected  Districts  and  the  range  of additional  services  may  be  increased  gradually  after  gaining  experience  and assessing viability. (Para 10.3.4)
- 54)  The over-arching principle to be followed is that none of these services should be offered  at  a  loss,  but  should  be  profitable  and  earn  net  revenue  for  India Post. (Para 10.3.4)

## Insurance Services

- 55)  The  current  Departmental  organization  is  not  suitable  for  the  conduct  of  the Life Insurance business of India Post. (Para 11.2.6)
- 56)  The coverage of Postal Life Insurance may be extended by allowing· members of  the  general  public  as  well  as  Government/  PSU  employees  to  buy  PU policies. (Para 11.2.7)
- 57)  Operations  under  both  the  Postal  Life  Insurance  and  Rural  Postal  Life Insurance Schemes may be brought under the purview of the new Corporation. (Para 11.2.9.)
- 58)  India  Insurance  should  have  an  independent  Board  and  operate  at  arm's length from the Department of Posts. (Para 11.2.9.)
- 59)  India  Insurance  should  be  allowed  to  extend  a  full  bouquet  of  insurance services  in both  urban  and  rural  areas  as  it  sees  fit  on  the  basis of considerations of market profitability. (Para 11.2.9.)
- 60)  The  Life  Insurance  activities  of  the  Department  of  Posts  should  be  hived  off and converted into an independent corporate entity which may be designated as India Insurance or given some other suitable name.(Para 11.3.1.)
- 61)  India Insurance should be delinked from the Consolidated Fund of India. (Para 11.3.1.)
- 62)  The new corporate entity will initially be a 100% owned subsidiary of a (new) Holding Company, which will in turn be 100% owned by the India Post. (Para 11.3.1.)
- 63)  The new corporate entity would be fully regulatory complaint and will follow the norms as prescribed by the Government and the IRDA.(Para 11.3.2.)
- 64)  In course of time, the GoI in the DoP may disinvest part of its holding and allow the new entity to raise resources through an IPO offering in the market. (Para 11.3.3.)
- 65)  The initial capitalization cost and solvency requirements, estimated at Rs.100 crores, should be funded from the current insurance portfolio of the Department of Posts. (Para 11.3.4.)

- 66)  In future, additional capital may be funded through available surpluses, market borrowing or disinvestment as provided for in the Articles of Association. (Para 11.3.4.)
- 67)  India Insurance will enter into a MoU with India Post setting out objectives to be achieved and broad parameters of action. (Para 11.5.1.)
- 68)  India Insurance will initially draw most of its personnel from the current strength of  the  Department  of  Posts,  except  for  senior  executives  and  experts  as required. (Para 11.5.1.)
- 69)  Decisions on future inductions may be decided by the Board of Directors. (Para 11.5.1.)
- 70)  There shall be a transitional period of 1 to 3 years, during which preparatory steps  will  be  completed  and  the  new  structure  will  be  put  in  place.  (Para 11.6.1.)
- 71)  These steps shall .include incorporation of the new entity; transfer of resources and records; take-over of the business portfolio; training of personnel; expansion  and  diversification  of  the  Product  basket;  addition  of  corporate agents,  Banks,  Brokers  to  the  distribution  network;  making  operations  IT driven; and institution of Performance evaluation Protocols. (Para 11.6.1.)
- 72)  India  Insurance  will  also  engage  in  the  distribution  of  Non-Life  Insurance Products of other Insurance Companies,  including Motor, Fire, Marine, Engineering, Health, Personal Accident, Crop, Weather and Household Articles Insurance. (Para 11.7 .1.)
- 73)  India Insurance will only distribute such products on behalf of other Companies on  a  commission  basis  without  incurring  any  insurance  liability/  risk  in  this regard. (Para 11.7.3.)
- 74)  As  per  the  legal  requirements,  India  Insurance  may  take  up  a  Corporate Agency or Broker's License for its third party business, depending on whether it chooses  to distribute the products of one  or more  other Insurance Companies. (Para 11.7.4.)
- 75)  If  India  Insurance  distributes  the  products  of  more  than  one  Company  on  a Broker's  License,  a  separate  Company  will  have  to  be  incorporated  for  this purpose (Para 11.7 .4.)
- 76)  India Insurance should become a distributor of Non-Life Insurance Products, to begin  with  as  a  Corporate  Agent,  with  the  option  to  convert  it  to  a  Broker's License after it gains experience and develops an appropriate personnel base. (Para 11.7 .6.)
- 77)  The  independent  company(ies)  owning  the  Broker's  License  to  distribute, which can be a Private or Public Limited Company(ies) will be 100% owned by the Holding Company. (Para 11.7.6.)
- 78)  A  systematic  publicity  campaign  should  be  planned  and  executed  by  India Post,  in  collaboration  with  a  professional  advertising  and  PR  company,  to support the activities of the new entity, India lnsurance.(Para 11.8.2.)

## Money Remittance Services

- 79)  India Post should strengthen its capabilities and diversify the range of products which  it  offers,  paying  particular  attention  to  growth  segments  such  as  Card Based Money Transfers, Mobile Banking, Collection of EMls and bill payments. (Para 12.2.1.)
- 80)  India  Post  may  collaborate  with  the  National  Payments  Corporation  of  India (NPCI) to develop new financial products based on the RuPay Indian domestic card scheme. (Para 12.2.2.)
- 81)  India  Post  may  tie-up  with  RuPay  to  boost  the  acceptability  of  the  Card, particularly in rural areas. (Para 12.2.3.)

## Post Bank of India

- 82)  The proposal is not to convert the PO Network into a Bank, but to set up a fully professional new Bank to further financial inclusion and meet the objectives of the PradhanMantri  Jan  DhanYojana,  which  specifically provides for the extension of credit to all Indians resident in every part of India, particularly in rural areas. (Para 13.1.9.)
- 83)  This opportunity for achieving universal financial inclusion via technology and the institutional reach of the PO Network must not be lost. There is admittedly a risk involved, as there is in any new venture into uncharted waters. The risk involved  can  and  must  be  managed  in  the  interests  of  the  overall  larger national objectives. (Para 13.1.12.)
- 84)  The PBI must be professionally managed and operated, with credit and other risks being handled by experienced experts hired from the market. In its own interest, its operations must be fully in line and compliant with RBI Guidelines. (Para 13.1.13.)
- 85)  A new institution, to be called the Post Bank of India or by some other suitable name,  should  be  set  up  as  a  commercial  bank  offering  the  full  spectrum  of financial and banking services. (Para 13.2.2.)
- 86)  As the owner of the proposed PBI, the Government of India may take decisions as  appropriate  on  structural  and  organizational  issues  and  other  details, including the funding requirements. (Para 13.2.2.)
- 87)  The Task Force is of the view that the PBI should be set up under an Act of Parliament  and  that  establishing  the  PBI  as  a  statutory  institution  and  a Government Bank would enhance its credibility, insulate it from local pulls and greatly facilitate its operations. (Para 13.2.4.)
- 88)  It is essential to structure the proposed PBI in such a manner as to pre-empt the possibility  of  outside interests influencing its day-to-day  operations. (Para 13.2.5.)
- 89)  The Task Force also recommends that the PBI should initially be set up as a Public Sector Bank wholly owned by the Government of India. (Para 13.2.6.)
- 90)  The initial capital requirement, estimated  at  Rs.500  crores  as  per  RBI requirements, would be fully funded by the Government. (Para 13.2.6.)

- 91)  After the Bank establishes itself in 3 to 5 years, the Board of Directors could take a view on floating an IPO to raise fresh capital.(Para 13.2.6.)
- 92)  The PBI will focus on fulfilling the Government's mandate of financial inclusion and on bringing the un-banked and under-banked segments of the population, particularly in rural, semi-rural and remote areas within the ambit of the formal monetized economy. (Para 13.2.7.)
- 93)  A  view  needs  to  ·be  taken  on  how  best  to  seamlessly  integrate  the  earlier banking operations into the proposed new structure, The  best and seamless method would be to fully absorb the POSB in the new proposed Bank (PBI). (Para 13.2.8.)
- 94)  The PBI will offer services including credit, which are beyond the remit of the POSB. (Para 13.2.9.)
- 95)  The  PBI  will  develop  financial  products  arid  services  which  are  specifically tailored to the needs of the rural and urban unbanked population, if necessary in collaboration with other banks. (Para 13.2.9.)
- 96)  The PBI will function as a commercially viable and self-sustaining entity without the need for continuing Government subsidies. (Para 13.2.10.)
- 97)  After  the  initial  gestation  period,  it  should  generate  its  own  resources  and sustain itself in the competitive market environment. (Para 13.2.10.)
- 98)  The PBI should price its services on a cost plus basis and revise these rates from  time  to  time,  so  that  its  operations  do  not  become  a  continuing  and increasing burden on the Government exchequer.(Para 13.2.11.)
- 99)  The PBI will start with a Head Office Main Branch and will thereafter expand its operations by opening Branch offices in the Metro towns and State capitals, to be manned by banking professionals. (Para 13.2.12.)
- 100) The longer term objective would be to establish a Branch Office of the PBI in each District Headquarter over a 3 to 5 year period, to be operated mostly by banking professionals. (Para 13.2.12.)
- 101) The  150,000-plus  Departmental  and  Branch  POs  will  act  as  Banking Correspondents for the PBI. (Para 13.2.12.)
- 102) Careful  consideration  should  be  given  to  the  various  types,  elements  and levels of risk involved in the PBl's operations. (Para 13.3.1.)
- 103) Robust System Protocols and Standard Operating Procedures should be put in place to manage these risks effectively. (Para 13.3.1.)
- 104) The  PBI  should  recruit  /  commission  the  services  of  banking  experts  to manage its credit, portfolio and market risks. (Para 13.3.3.)
- 105) Appropriate  management  capabilities  should  be  mobilized  from  the  market and robust systems and processes should be put in place to ensure that NonPerforming Assets are kept within acceptable limits. (Para 13.3.3.)

- 106) It is neither necessary nor desirable to mandate a waiting period before the PBI enters into credit and lending operations. (Para 13.4.1.)
- 107) The  PBI  should  be  constituted  and  begin  working  as  a  credit  and  lending Bank immediately, without any trial / waiting / learning period. (Para 13.4.2.)
- 108) The PBI should be· set up as an independent Statutory and corporate entity offering the full bouquet of banking services, including credit, to its customers. (Para 13.4.3.)
- 109) The PBI will primarily target currently unbanked and under-banked customers in  rural,  semi-rural  and  remote  areas,  with  a  focus  on  providing  small  and affordable loans and simple deposit products. (Para 13.4.3.)
- 110) Customers will be provided with full-fledged Savings Accounts, which can be retained even with zero balances, as provided for in the PMJDY. (Para 13.4.3.)
- 111) Credit risks will be managed by hiring professionals from the banking sector and by developing and implementing robust protocols for building checks and balances in the system. (Para 13.4.3.)

## Extension of PO Network in Rural Areas

- 112)  The  DoP should conduct a  derailed survey  and  thereafter  approach State Governments, many of which have voluntarily agreed to provide land / space for  the  establishment  of  POs  in  Gram  Panchayats  and  villages,  with  specific proposals for the establishment of POs where India Post does not .at present have a Point of Presence. (Para 14.1.2.)
- 113) The  Department  of  Posts  faces  budgetary  limitations  in  establishing  and operating  new  POs.  In  this  context,  the  Task  Force  recommends  that  India Post  should  explore  the  possibilities  of  working  with  State  Governments, District  Administrations,  Gram  Panchayats,  LocalSelf-Government  bodies,  as well as with social and community groups to establish POs. With the proposed expansion in the bouquet of services which will be offered by POs, it should be possible to position the local PO as a Community and Social Centre and locate it  in  existing  buildings  and  institutions  with  which  it  enjoys  synergy.  (Para 14.1.3.)

## Availability of Power

- 114) In the medium-term if not immediately, power supply should be assured to all rural  POs,  if  necessary  by  supplementing  electricity  supply  by  installing  roof top, solar, PV based systems at all PO buildings where power is unavailable or inadequate. (Para 14.2.6.)
- 115) This project may be taken up in stages after ensuring availability of funds in the Department's budget. (Para 14.2.6.)

## Salaries and Allowances of DoP Personnel

- 116) In restructuring the operations of India Post, special care should be taken to maintain and enhance the levels of morale, motivation and satisfaction of the staff at all levels. (Para 15.1.2.)
- 117) Existing  salaries  and  allowances  of  employees  should  not  be  adversely affected and there should be no retrenchment during or as a result of the restructuring process. (Para 15.1.2.)

- 118) Rural  postmasters/  postmen/  GraminDakSewaks  will  be  delivering  a  wide variety  of  services,  along  with  associated  payments  and  banking  activities  in the  rural  sector  and  should  be  compensated  on  a  commission  basis  for  the same. (Para 15.1.3.)
- 119) In order to incentivize the staff, they should be entitled to Commissions on profit-sharing basis in addition to their existing salaries and allowances. (Para 15.1.4.)

## Pension Liability of India Post

- 120)  The  pension  payments  of  India  Post  should  be  paid  through  the  Central Pension Office and brought in line with that of other Government Departments rather  than  being  borne,  as  at  present,  on  the  Department's  books.  (Para 15.2.1.)

## Membership of Clearance Houses for the DoP

- 121) All  Head  POs,  MukhyaDakGhars  and  all  HSG-1,  HSG-11  and  LSG  level sub-  POs  should  be  made  Full  Members  of  the  respective  Local  Clearing Houses, in order to ensure that cheques are cleared on the same day rather than, as at present, with a delay of 7 to 10 days. (Para 16.1.6.)

## Use of Aadhar Data Base

- 122) The  Aadhar  data  base  will  be  the  primary  means  of  authenticating  the identity of individuals to whom payments/ services are being provided. Where the  individual  is  not  covered  by  Aadhar,  the  PO  Network  or  other  data  base may be accessed to authenticate his identity. (Para 16.2.1.)
- 123) Where  social  security  schemes  and  entitlements  are  household  /  family based, it will be the responsibility of the concerned State Government /District / Local Administrations to ensure that the individual beneficiary is in fact entitled to the service  /  payment  being  provided  and  obviate  the  possibility  of duplication  or  fraud  in  the  implementation  of  Government  schemes.  (Para 16.2.2.)
- 124)  The PBI data-base would need to be updated and re-checked periodically to eliminate duplication of beneficiaries. (Para 16.2.3.)
- 125) The Aadhar data-base will be the primary means of biometric identification, the PBI should also develop its own data-base focusing on the family or household  and  link  it  to  the  Aadhar  data-base  for  functional  and  operational purposes. (Para 16.2.5.)

## Segmentation of Aadhar Data Base

- 126) In order to speed  up  biometric  identification and  improve  operational efficiency,  the  Aadhar  data  base  should  be  segmented  State-wise  or  even district-wise. (Para 16.3.1.)
- 127) The smaller data base focused on the particular District should be accessed in  the  first  instance  and  the  larger  data  base  should  be  resorted  to  as  a secondary procedure only if identity authentication on the truncated data base fails. (Para 16.3.2.)

## Special Facilities for Commercially Important Clients (CICs)

- 128)  Commercially  Important  Clients  (CICs)  should  be  treated  as  a  special category and provided with a Bulk Client code through which they can access updated data and ascertain delivery status immediately.(Para 16.4.1.)
- 129)  CICs should be allowed to frank the postage impression while printing the communication letter itself. (Para 16.4.1.)

## Publicity & Public Relations

- 130) India Post should conduct a sustained publicity campaign at the national as well as local levels to raise awareness, especially in the middle and low income segments,  unorganized  sector,  rural  areas  and  migrant  workers  about  the benefits  of  banking  and  insurance  schemes  available  at  the  local  PO.  (Para 17.2.1.)
- 131) India Post may conduct a more general mass national publicity campaign to popularize  writing,  collecting  stamps,  sending  post  cards  and  communicating by post. (Para 17.2.2.)
- 132) This  campaign  could  focus  on  school  children,  encouraging  them  to  write letters and send cards to friends and relatives. (Para 17.2.2.)
- 133) Book  stands  and  stalls  could  be  set  up  at  national  fairs,  airports,  railway stations and inter-State bus stands. (Para 17.2.2.)
- 134) Post Boxes should be provided in each locality and serviced on a daily basis. . (Para 17.2.3.)
- 135) It  should  be  ensured  that  Service  Lists  and  Rate  Cards  are  prominently displayed in all Post Offices. (Para 17.2.3.)
- 136) Postal  employees  should  be  given  training  and  motivation  sessions  to inculcate patience, politeness and courtesy in dealing with the general public. (Para 17.2.3.)

## Global Best Practices

137)  India  Post  /  Parcel  should  make  postal  services  available  to  citizens electronically through the introduction of digit a I stamping and franking machines at postal counters, internet postage and electronic mail boxes. (Para 18.2.1.)

## New Postal Law

- 138) The existing Post Office Act dates back to 1898 and cannot deal adequately with  existing  market  conditions  and  the  seminal  changes  in  communication brought about by computerization and connectivity. (Para 19.1.4.)
- 139) A new Post Office Bill is required to provide a legal basis for organizing the postal sector and make India Post, as the National Service Provider, fully in compliance with UPU and USO requirements. (Para 19.2.2.)
- 140) The  process  of  finalizing  the  proposed  revised  Postal  Act,  already  under examination, should be taken up in due course. (Para 19.2.5.)
- 141) To enable the implementation of the suggestions made in para 19.3.1. and 19.3.2., it is recommended that a new Act may be promulgated, enabling the department  to  establish  new  corporate  structures,  including  a  full  service

bank, as also to empower the department to make revisions to the prices of the articles of Post from time to time. (Para 19.3.3.)

## New Organization Design of India Post

- 142) The current hierarchical and pyramidal organizational structure of the DoP, dilutes responsibility and accountability and is not suited for efficient functioning in a market oriented environment. (Para 20.1.1.)
- 143) A  new  organization  design  is  required  which  will  enable  India  Post  to  be organized  and  run  on  commercial  lines  while  retaining  its  fundamental character  as  an  organization  delivering  public  goods  with  a  social  purpose. (Para 20.2.1.)
- 144) The  operations  of  India  Post  should  be  economically  viable  and  the Organization  should  be  able  to  stand  on  its  own  without  depending  on  the Consolidated Fund of India for financial support. (Para 20.2.2.)
- 145) This goal will be achieved gradually and in stages over a planned period of time. (Para 20.2.2.)
- 146) The  entire  range  of  services  provided  .by  India  Post  should  be  organized and grouped in 6 Strategic Business Units (SBU), 5 of which will be expected to act as profit centres. (Para 20.2.3.)
- 147) The sixth Unit, designated as the 'Communications Delivery Unit,' is not to be  expected  to  make  profit;  its  primary  function  will  be  to  deliver  mail  at subsidized  rates  as  a  public  good  to  serve  the  needs  of  the  common  man. (Para 20.2.3.)
- 148) The Communications Delivery Unit, dealing with postal mail like post cards and  inland  letters,  will  continue  to  be  Departmentally  organized  and  not expected  to  be  commercially  profitable  but  will  be  subsidized  by  the  other SBUs. (Para 20.2.4.)
- 149)  The remaining functions relate to delivery of parcels, packets and e-Commerce  articles;  banking,  money  transfer  and  financial  services;  life insurance business;  distribution  of  third  party  products;  and  management  of governments services. (Para 20.2.5.)
- 150) These  functions  will  be  commercially  oriented  and  the  SBUs  dealing  with these services will be expected, contribute towards meeting the financial gap of the Communications Delivery Unit and deliver substantial revenue surpluses  to  the  Holding  Company  within  a  period  of  3  to  5  years.  (Para 20.2.5.)
- 151) Each  SBU  will  decide  policies,  design  products,  conduct  training  courses, and manage the operations on the basis of decisions by its own Board. (Para 20.2.7.)
- 152)  However, all the SBUs will use the .common physical and human resources of the Post Office Network Organization. (Para 20.2.7.)

- 153) All  the  SBUs  will  be  required  to  pay  appropriately  for  the  use  of  these services from the revenues generated by them. (Para.20.2.8)
- 154) Since Postmen will now be expected to deliver a variety of services in the rural  areas, including  banking  and financial  services as  well as  Government and third party services, the staffing pattern in Branch and rural POs should be reviewed so that each such PO is staffed by at least 2 employees, one of whom  will  man  the  PO  while  the  other  Postman  is  on  his  daily  round. Requisite  intensive  training,  including  refresher  courses  will  be  given  to  all concerned. (Para 20.2.9)

## Compensation of Staff

- 155) The  personnel  of  India  Post  will  continue  to  draw  remuneration  at  their present rate and as mandated by the Pay Commission until such time as it the Company  is  able  to  decide  its  own  compensation  policies  and  meet  the commitments arising thereof. (Para 20.3.1.)
- 156) In addition, they will have a variable component of compensation calculated as a share of the profitability of the SBU. This component will be available to each  employee in  varying  degree  right  up  to  the  Head  of  the  SBU  and  the Chairman and Members of the Board. (Para 20.3.1)
- 157) The  personnel  working  in  the  Communication  Delivery  Unit  will  also  get  a variable  component  of  compensation  based  on  the  quality  of  services rendered and customer satisfaction. (Para 20.3.2.)
- 158) The operational and supervisory personnel of the common and over-arching superstructure will also be similarly compensated. (Para 20.3.3.)
- 159) The process of creating SBUs as corporatized and fully owned Subsidiaries of the DoP may be undertaken in stages. (Para 20.3.4.)
- 160) Three corporate structures be immediately created for: {a) Banking and Other Financial  Services;  (b)  Insurance  Operations,  and  (c)  logistics  and  Parcel delivery/e-commerce. (Para 20.3.4.)
- 161) Over a 3-year time span, the other SBUs may also be corporatized after they gather momentum, strength and confidence. (Para 20.3.5.)
- 162) At  a  minimum,  5  lakh  new  jobs  are  likely  to  be  directly  created  by  this exercise over the next 3 to 5 years. (Para 20.3.7.)
- 163) As  infrastructure  expands  on  the  ground  and  appropriate  investments  are made, induction of personnel is likely to increase even further. (Para 20.3.7.)
- 164) There  would also be  an indirect  but  important  multiplier  effect  of  additional jobs being created in the rural economy. (Para 20.3.7.)

## Structure of the Holding Company

- 165) A  Holding  Company  fully  (100%)  owned  by  the  DoP  may  be  incorporated, with Subsidiaries or Strategic Business Units (SBUs) for:
1. Banking and Financial Services
2. Insurance Products
3. Distribution of Third Party Products

4. Management of Government Services

5. Parcels and Packets, including E-commerce Articles (Para 20.4.1.)

- 166) The  Communications  Delivery  Unit,  dealing  with  Written  Communication Transmissions  (WCT)  will  continue  to  be  handled  by  India  Post  within  the Departmental framework. (Para 20.4.2.)
- 167) The  Banking  and  Financial  Services  Company/  PBI  will  have  the  POSB under its purview. (Para 20.4.3.)
- 168) The  Insurance  Company/  SBU  will  deal  with  PLI  and  RPLI  and  any  other insurance products which it may develop in future. (Para 20.4.4.)
- 169) In· addition, it will own one or more Companies dealing with the distribution of insurance products of another insurance company (Agency License) or more than one Insurance Company (Broker's License). (Para 20.4.4.)
- 170) The  Company/  SBU  dealing  with  Distribution  of  Third  Party  Products  will provide services on behalf of the private sector. (Para 20.4.4)
- 171) An  indicative  list  of  342  services,  already  being  provided  by  the  MeeSeva Services  in  Andhra  Pradesh  and  Telengana  is  already  available.  This Company/ SBU of India Post can deliver many or most of these services to the rural areas on behalf of private parties on payment basis. (Para 20.4.5.)
- 172) The Company/ SBU dealing with Management of Government Services will deal with all services requiring registration, certification or Governmental oversight,  including  Aadhar  and  Ration  Cards,  and  will  effect  bill  collection  and payments on behalf of Government Departments. (Para 20.4.6.)
- 173) The Company or SBU dealing with delivery of Parcels and Packets will also manage the  tie-ups  and  agreements  with  E-commerce  players  for  delivery, return,  bill  collection  and  payments  for  E-commerce  Articles  and  will  handle the e-commerce delivery operations of India Post. (Para 20.4.7.)
- 174) The  net  profit  generated  by  the  Subsidiary  Companies  will  belong  to  the Holding Company which will be their sole and 100% owner. (Para 20.4.9.)
- 175) This profit will be transferred to the Holding Company after retaining enough funds for the expansion and  organization building of each Subsidiary Company. (Para 20.4.9.)
- 176) The  Subsidiary  Companies  may  in  future  be  listed  in  Stock  Exchanges  to raise capital as and when this is required. (Para 20.4.10.)
- 177) The strategic objective will be to make the Subsidiary Companies (with the exception  of  the  Communications  Delivery  Unit)  self-financing  beyond  the transition  period  and  enable  them  to  function  without  financial  support  from the  Government  of  India  and  in  fact  become  contributors  to  the  national revenue pool. (Para 20.4.11.)
- 178) The individual Companies /SBUs will be both empowered and accountable, so as to enable them to operate profitably in a competitive market environment. (Para 20.4.12.)

- 179) The  individual  Companies/  SBUs  will  have  separate  Boards  of  Directors, which will manage the earmarked line of business. (Para 20.4.15.)
- 180) The  Chairman  of  each  of  the  Companies/  SBUs  will  be  a  Member  of  the Holding company's Board. (Para 20.4.15.)
- 181) All these Companies  / SBUs  will use the common  infrastructure of Information  Technology,  Human  Resources  and  Physical  Infrastructure,  the ownership of which will continue to vest with the DoP.(Para 20.4.15.)

ANNEXURE REFERRED TO IN PARTS (c) TO (e) IN REPLY TO THE LOK SABHA UNSTARRED QUESTION NO.4449 TO BE ANSWERED ON 14.12.2016 RAISED BY SHRI  BAHADUR  SINGH  KOLI,  MEMBER  OF  PARLIAMENT  REGARDING  TASK FORCE ON POST OFFICE.

- (a) To  increase  Postal  Life  Insurance  (PLI)/Rural  Postal  Life  Insurance  (RPLI) business, the following initiatives have been taken:-
- (1) Setting of business targets as per the potential to all Postal Circles;
- (2) Constant monitoring of progress in achievement;
- (3) Revamping the marketing structure of PLI/RPLI sales force;
- (4) Training of PLI/RPLI sales force to improve their skills;
- (5) Improving after-sales service of PLI/RPLI and prompt redressal of public grievances;
- (6) Technology  induction  leading  to  customer  friendly  initiatives  such  as premium receipt confirmation, policy conversion, maturity due intimation, etc.
- (b) To increase the eCommerce market the following initiatives have been taken:-
- (1) Introduction of Cash-on-Delivery facility especially  for  e-Commerce Companies with effect from 02.12.2013 as a value addition to the Speed Post, Express/Business Parcel.
- (2) Introduction of National Account facility under Speed Post and Express/Business Parcel.
- (3) Establishment of 57 integrated Parcel Processing Centres and mechanizing the pickup/delivery of parcels.
- (4) Provision of packaging, shrink wraps facilities, secure plastic seals and parcel movement in a well-defined network.
- (5) Providing  Application  Programme  Interface  (API)  to  the  customers  for real time information.
- (6) Same day/next day delivery of eCommerce articles in selected cities.

***********