India Post On Ventilator: Can India’s Postal Service Be Saved Before It’s Too Late?

In the chaotic life of modern India, there is one institution that has connected the nation for more than 150 years—the India Post. This venerable service, with its red buildings from the top cities to villages across the nation, stands at a juncture. For generations, encountering the postman—or “dakiya,” as he is affectionately referred to in much of India—has been synonymous with connection, communication, and trust. Yet today, this institution is finding it difficult to stay relevant in a digital age that appears to have passed it by.

The finances reveal a grave issue. For every rupee that India Post earns, it spends Rs 1.5 as salaries, another Rs 0.7 as pension payments, and ends up losing Rs 2 in total. This giant organization has unfortunately acquired the dubious reputation of being “the biggest loss-making Public Sector Undertaking” of the nation. The figures are actually mind-boggling—annual incomes of around Rs 12,000 crore against gigantic expenditures of Rs 36,000 crore. Of these expenditures, a whopping Rs 18,000 crore is paid out as salaries and allowances, and pension payments swallow up another Rs 8,000 crore. One cannot help but ask:

India Post Is The Biggest Loss making PSU, So, Is this the end of the beginning of an organization that has been the spine of India’s communication system?

Throughout history, postal services all over the world have suffered the same serious problems. The United States Postal Service, which started operating in 1775, has incurred losses of more than $87 billion during the last 14 years. In the United Kingdom, the Royal Mail—once a symbol of proud British public services—was privatized in 2013 after years of losses. Likewise, Japan Post was privatized in 2007 to stem rising losses. These same narratives uncover a shared fact: traditional postal services need to reform or they will fall apart in the digital era.

But while most post offices elsewhere are the domain of the privileged few, India Post serves a special class of individuals. For millions of rural Indians, the post office is not merely a destination where mail is received—it is a thrift bank, a life insurance company, and at times the sole material connection to the government. The saying “When all else fails, the post office delivers” is particularly apt in India’s 6,50,000 villages, where the symbols of modernity are often beyond reach.

Receiving a hand-written letter was a big deal, but nowadays everyone desires immediate digital messages. Do you remember when families looked forward to the postman with the hope of receiving letters from far-off relatives? Those blue letters and postcards that contained daily news and innermost emotions are on the brink of becoming extinct because of WhatsApp messages and emails. Author Ruskin Bond once said, “A letter always seemed to me like immortality because it is the mind alone without corporeal friend.” Now, this feeling of immortality seems to be in danger in an age of ephemeral digital conversations.

But let’s be frank—India Post cannot be shut down or even substantially curtailed. It is a part of the country’s infrastructure, especially for rural India. The question isn’t whether it has to—it’s obvious—but how it can change to become financially sustainable. Right now, it depends heavily on taxpayer money, which is a problem that needs drastic changes. This need is highlighted by the government’s plan to make the service profitable in the next 5-6 years. Union Telecom Minister Jyotiraditya Scindia announced plans to turn India Post into a logistics company, with a plan to increase its revenue by 50-60% in the next 3-4 years.

Looking at the history of India Post teaches us about its current challenges. It was founded during British times in 1854 and evolved from an agreement mainly for government and military communications to an all-around public service. After independence, it became a key aspect of assisting people manage money through the introduction of savings schemes, money orders, and later postal life insurance. The department also took on more social functions, often at the cost of its profit-making ability. This is why 90% of India Post offices are in rural areas, even though these are less profitable than in cities.

The time around the early 2000s brought about a huge transformation among the postal services in the globe. More people moved towards using emails, mobiles became common, and then finally, social networking changed the way people interacted. India Post was also in the midst of this fast-paced change, trying to cope while attempting to hold on to the old services. The amount of personal mail reduced significantly—by some estimates, over 60% in a span of ten years. On the other hand, pension and fixed expenses kept on rising, occupying over 95% of its share and leaving barely any space to innovate or modernize.

Despite all this, India Post has one strength no Indian private player can possibly rival—its incredible reach. It touches practically every PIN code in the nation with a reach of 1.56 lakh post offices. This provides it with a last-mile delivery advantage that giants of online retail like Amazon and Flipkart can merely dream of. As goes the old adage, “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.” In India, there is no hill too steep and no village too remote for the mailman to reach.

This huge network provides numerous opportunities, particularly in e-commerce delivery. With more use of the internet and mobile phones by Indians, online shopping is reaching the tier-2, tier-3 cities, and rural areas. Who is better placed to deliver these packages than the organization that has been catering to these areas for decades? India Post postmen, familiar faces in their localities, could be trained to be e-commerce delivery folks,which will contribute in improving services and eventually generating more revenues and pink notes by pulling the India Post from loss-making Blues! Additionally, the service could enhance its returns capacity for online shoppers. This is a key area that requires trust and reliability.

The financial services sector is another good option. India Post Payments Bank (IPPB) has Rs 8.23 lakh crore in deposits and is already a robust banking entity, particularly in areas where regular banks are not prevalent. Going by this success, India Post can provide small loans and microcredit to assist rural business owners. As Mahatma Gandhi quoted, “The soul of India lives in its villages.” Assisting these villages with access to finance can transform India Post’s position and also assist rural development greatly.

Insurance is another space that remains untapped. India Post has traditionally offered life insurance under Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI), but with only 20% of rural India covered, there is vast potential for expansion. Insurance processes can be digitized and private insurers partnered with to provide bundled products to expand reach and make it more cost-effective.

India Post has a huge portfolio of properties in good locations all over India, but they are not being utilized. They can be converted into co-working spaces or delivery hubs for small businesses, generating steady rental revenues. The post office in Mumbai’s Fort area or in Delhi’s Connaught Place can be thriving business hubs while still offering postal services.

India Post can be an online platform, providing a range of services to citizens, business, and governments. Broadband internet and digital infrastructure in rural post offices can bridge the digital divide. India Post can become a part of overall development by providing end-to-end solutions for government schemes, financial services, and logistics. “India has to be transformed into a developed nation, a prosperous nation and a healthy nation, with a value system,” former President APJ Abdul Kalam once said.

Public-private partnerships offer a mechanism to increase the size of the services. Utilizing a franchise model for new post offices, India Post can increase its outreach without raising its costs too much. Partnership with logistics firms will enable the supply chain to become more efficient and increase profitability. We can witness the success of such partnerships in Germany, where Deutsche Post rebranded itself as DHL Group, a logistics giant with a global presence.

To ensure this transition is successful, we need to emphasize technology investments. Automating operations with AI, IoT, and data analytics can smmoth out delivery routes and reduce costs. Transforming the workforce is also crucial; employees need to be empowered with digital tools, customer service, and logistics management to transform to new circumstances. As Charles Darwin once stated, “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.”

Minor adjustments will not be enough for an organization that is faced with serious challenges. India Post needs a strong and dynamic plan to change. Having clear-cut goals for customer satisfaction, revenue increase, and efficiency is essential to track improvement. Although government assistance in the form of funding is still important, the main goal must be to become independent by having other sources of earning money and cutting costs.

The recent pandemic demonstrated just how indispensable postal services were. When online services failed to keep up with the desperate need for deliveries, postal workers across the globe stepped in by delivering essential goods, medical supplies, and test kits. Postmen in India delivered pensions and cash directly to the doorsteps of elderly citizens, demonstrating that some services cannot be substituted completely by online means.

India Post is not just a vehicle for mail delivery; it connects people and government. It helps bridge city and village areas and is a dependable part of numerous communities across the country. Its future depends on becoming a digital, people-focused service. By using its core competencies—being near people, being dependable, and having wide reach—India Post can become a leader in online shopping delivery, financial services, and rural connectivity.

As we look to the future of this historic institution, we must remember that other similar services worldwide have remade themselves successfully. PostNord in Sweden diversified into logistics and e-commerce services, while Singapore Post positioned itself as an enabler of digital commerce in Asia Pacific. With vision, investment, and will to change, India Post too can write its turnaround script.

The tick of the clock in the background reminds us that time is of the essence. Every passing day takes this venerated institution closer to unviability. And yet, with its rich history and unmatched network, India Post offers the possibility of a dramatic turnaround. The issue is not if it can be saved—it must—but if we all have the will to re-imagine and re-build this vital service for the 21st century. As the saying goes, “The mail must go through”—but perhaps in ways we have yet to imagine.