Government will have to review the rationale and the size of the postal subsidy. The Economic Survey has projected the size of the postal subsidy to touch Rs 1,379 crore in 2006-07 (budget estimates), up from Rs 1,375 crore in 2003-04.
"Redefining the rationale, the mechanism and the size of the subsidy constitute an important policy question at this juncture," the survey pointed out.
Currently, all services of post offices are subsidised with user charges in the postal system covering only 78 per cent of the costs.
The biggest subsidy is on money orders with a per unit subsidy of Rs 25.80. This alone adds about Rs 287 crore to the postal deficit, the Survey said.
Even registered post, which is generally used by commercial establishments, has a subsidy of Rs 15.90 per unit, adding another Rs 305 crore to the deficit. Post cards too attract a per unit subsidy of Rs 6.39, amounting to Rs 172 crore.
Accounting the ongoing development in the implementation of automated technologies in the Department of Posts, the Survey said that two Automatic Mail Processing Centres will be set up in Kolkata and Delhi.
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