Failure of Post Service (Bhartiya Dak Seva) in India

In India, if we want to send something we send through by courier. Nowadays many courier partners are available in the market but in older days only post service was there (Bhartiya Dak Seva) and then slowly and steadily they started bank services, Insurance services and many more. But as time flows off the value of services are diminishing from the market. In India, people are very cautious about their hard earn money they think twice when they investing money in financial services.

In Indian market soo, many financial service providers are available but among them, the still

Why so most trusted one is Indian POST service. ....?? Let's see

The first post office in India was established by East India Company in the year 1688 in Bombay followed by Calcutta and Madras. It was named as "Company Mail". The Post Office Department of the East India Company was first established on March 31, 1774, at Calcutta, followed in 1778 at Madras and in 1792 at Bombay.

The present type of post office came in the year 1854 under the post office Act of 1854. The number of post offices in India increased from 23,344 in 1947 and 1, 54,866 as on 31-03-2011. Out of total post offices in India, 1,39,040 numbers post offices are in rural areas and remaining 15,826 numbers of post offices situated in urban areas which are only 10.22% of total numbers of post offices.

The Indian Post starts Postal Life Insurance in the year 1984 as a welfare scheme for the employees of the Post and Telegram Department due to the huge demand of the scheme later on it was opened for employees of other departments and finally, in the year 1995, it was opened for all people. In addition to these services post office also provide money transfer services. Post Office Savings Bank which was established with an objective of encouraging saving

                  Reference:-Post Annual Report-Annual Report | 2017-18

The primary aim of starting post service was to provide financial inclusion. 

( Financial inclusion means collecting all individuals who are in a remote rural area to a well functioning financial service). Financial inclusion plays an important role in the growth of the country. Financial inclusion which provides financial services which allow maximum investment in business opportunities, education, save for retirement, insurance against risks, etc. by the rural individuals and firms. In India, the basic concept of financial inclusion is having a saving or current account with any bank. In reality, it includes loans, insurance services and much more. In advanced economies, financial inclusion is more about the knowledge of fair and transparent financial service.

There are several factors affecting the financial inclusion service provided by post such as

•  weaker sections of society in India.
•  Lack of awareness of
• low incomes and assets
• social exclusion 
• illiteracy are the barriers from the demand side
• banking procedure
• the requirement of documents for opening bank account suitable banking products/schemes
• language barriers
• high transaction costs and attitudes of bank officials are the barriers from the supply side. 

Multiple initiatives had undertaken by both GOI and the RBI to tackle the problem related to financial services. Many of these initiatives were entirely new schemes with little thought about synergy with other schemes existing in the system.

                        Reference:-Post Annual Report-Annual Report | 2017-18

Problems and challenges in Indian Post:

1)Lack of Basic Infrastructure: 

The post offices in India, especially post offices in rural areas which play an important role in providing financial services in rural areas are not equipped with basic infrastructure. In most of the post offices, even a proper sitting arrangement for staff as well for the customer is not available.

2) Fewer Numbers of Staff: 

There is a crunch of manpower in the post offices. It is observed that most of the post offices are run by one or two persons and need to do all sorts of work which has a very adverse effect on performance and output.

3) Lack of Coordination:

There are many examples in foreign countries where post offices are doing tremendous work for financial inclusion in coordination with other departments. But, till today Indian post keep itself away from other sister organization or other organization also not seeking coordination of Indian post in

providing financial services.

4)Slow Progress of Innovation:

To cope with the fast changing environment Indian post also need to be catching the new invention and technology timely. The Indian post still following the age-old practices of working, though it bringing some innovation recently bat in a very slow speed. Out of total post offices, only25464 post offices are computerized till 2011-12.

5)Abstain From Landing: 

Providing loan is one of the major aspects of financial inclusion but Indian post is not till today taking it as a part of its business which has narrowed down its operation.

Reference:-Post Annual Report-Annual Report | 2017-18

Indian post is playing a very important role in financial inclusion but it can play a much better role

if it can overcome the above problems: 

• Indian Post should tie-up with Banks to utilize their extensive network by setting up small banking counters at each of their post offices, especially rural branches.
• The government-owned post offices have sufficient space in the post offices to set up such a counter with a computer and printer, to be operated by a commercial bank employee.

 Thus the post offices and their capabilities can work as an alternative banking solution for the better improvement of financial inclusion.