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DEPARTMENT OF POSTS TARGETS PRIVATE COURIERS
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The Indian Government proposes to restrict private courier companies from delivering letters that weigh less than 300 grams.
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On April 20, 2006, the Indian Government announced that it proposed to bring about a few amendments to the Indian Post Office Act, 1898, which included providing exclusive rights to the Department of Posts (DoP) to carry and deliver letters that weighed up to 300 gm.
This was seen as a move to help the DoP tackle the stiff competition it was facing from private courier companies.
Further, the government proposed that courier companies with a turnover of Rs 2.5 million and more would have to contribute 10% of their revenue toward the Universal Service Obligation Fund (USO).
The funds under the USO would go to finance postal services in remote areas and other unviable post offices.
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The government also proposed to increase license fees of Rs 25,000 and Rs 10,000 for registration and renewal of small and medium courier companies respectively. Large courier companies that had national and international operations would have to pay a registration fee of Rs 1 million and a renewal fee of Rs 0.5 million.
The proposed amendments had the private courier companies up in arms. They strongly opposed these moves, terming them as “unfair” and “retrograde”. R K Saboo, chairman, Express Industry Council of India (EICI), said, “The draft bill seems to have confirmed our fears of the government proposing a retrograde amendment. Any weight restriction on documents to be carried would be highly detrimental to consumers.”
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Abheek Mitra, managing director of TNT India2 , said, “The proposal is retrograde. It will make many serious players rethink their plans of putting money in this market. I fail to understand why the government is taking such a damaging step when there is so much enthusiasm among private players to invest in this industry.”
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Continued...
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1) “Courier firms oppose postal bill,” http://in.rediff.com, April 20, 2006.
2) TNT is a distribution and logistics service provider to both international and domestic destinations.
3) Praveena Sharma, “Kill Bill will rob courier and express industry of Rs 2,000 cr,” www.dnaindia.com, April 21, 2006.
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