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Why Are Postal Workers Striking in Such Large Numbers?

Postal workers are mobilising in large numbers to protest the Union government's moves to corporatise the Postal Department's banking services, among others, without holding meaningful consultations with postal employees.
India Post's head post office in Delhi's Sansad Marg. Photo: PTI.

New Delhi: The National Federation of Postal Employees (NFPE) has claimed that a majority (60%) of the 4.5 lakh employees of the Postal Department in the country are on strike on Wednesday, August 10, to protest against what they allege are attempts by the Union government to privatise and corporatise certain sections of the department.

The strike is reportedly the result of failed talks between a number of federations representing postal workers – who have come together under the banner of the Postal Joint Council of Action (PJCA) – and the Union government’s Ministry of Communications Department of Posts (DoP) with regards to the ‘corporatisation’ plan.

According to Newsclick, months-long correspondence between the federations and the DoP have been fruitless in halting the progress of the corporatisation push.

India’s postal service, known more commonly as ‘India Post’, is a colonial-era service that has persisted even 75 years after Independence. Today, it is the most widely-distributed postal system in the world, as mentioned in the Newsclick report.

Apart from its core function of distributing mail, India Post also assumed more responsibilities in the intervening years, accepting deposits under the Post Office Small Savings Scheme, providing life insurance cover, and even acting as an agent of the disbursement of wages to workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

The Union government’s push to corporatise some of these sundry functions is what has got the postal employees worried.

Speaking to the Hindu, Janardan Majumdar, secretary general of the NFPE (which is part of the PJCA) said that the postal department, during the COVID-19 pandemic, used the ‘Dak Mitra’ scheme to subsume all failed postal franchise units.

Majumdar criticised the franchise system, saying that the need for more post offices should be met by actually opening more post offices rather than franchising, which will ultimately only eat into the finances of the department. 

Another concern of postal employees, voiced by Majumdar to the newspaper, is the government’s attempts to corporatise the small savings scheme through the introduction of the Indian Postal Payment Bank (IPPB) Limited.

Following the recommendations of the T.S.R. Subramanium-led task-force to better leverage the vast postal network in the country, the Union government, in 2018, incorporated the IPPB; the first corporate entity under the DoP. The IPPB was launched with 650 branches and 3,250 access points, all while ignoring numerous agitations by postal employees. 

As the IPPB expanded and leveraged India Post’s vast distribution network, it created a modernised system of post offices that provide unified banking services to people across the country. However, earlier this year, the Union government proposed the merging of the banking and insurance functions of the postal service with the IPPB, which was met with protests from the postal employees.

Also read: How India’s Plan for Bank Privatisation Is Fraught with Serious Challenges

As the Hindu report details, the Post Office Savings Bank (POSB), through which the Postal Department operates its banking and insurance functions, has around 30 crore accounts and Rs 10 lakh crore of outstanding balance. These functions account for around half of the department’s total revenue and as such, merging this function with the IPPB would deal a heavy blow to the Postal Department’s finances.

Majumdar told the newspaper that the fears of the postal employees came true when the government suggested that only the core postal duties should remain with the department and the banking and insurance functions should be merged with the IPPB.

A further blow was dealt when it said that no ‘dual structure’ should operate in the financial sector and that the banking and insurance services should be the sole reserve of the IPPB.

Majumdar also opined that the government is likely to announce the complete migration of these services to the IPPB on Independence Day; August 15. “Actually, these are disastrous steps which will finally legalise the grip of corporates over the huge amount of public money deposited in Post Office Savings Banks (POSB). Also the security of this huge amount of public money will be under question,” the Hindu quoted him as saying.

He further said that the government should have held meaningful consultations with stakeholders before “changing the character of PSOBs”.

Additionally, concerns regarding the de-linking of the Railway Mail Service from the Railways have also sprung up. The Hindu report also quoted P. Suresh, the leader of the All India RMS and MMS Employees Union, as highlighting that, as the service is being de-linked, e-commerce giant Amazon has declared its intention to start using the railways for faster delivery.

“It is crystal clear what is the direction in which the NDA government is moving. Their axe has now come on the Postal Department and RMS,” the Hindu quoted him as saying.

 

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