POSTAL JOINT COUNCIL OF ACTION

NATIONAL FEDERATION OF POSTAL EMPLOYEES

FEDERATION OF NATIONAL POSTAL ORGANISATIONS

ALL INDIA POSTAL EXTRA DEPARTMENTAL EMPLOYEES

NATIONAL UNION OF GRAMIN DAK SEVAKS

NEW DELHI – 110001

NO SETTLEMENT

Today (30.06.2011) Secretary, Department of Posts, held another round of discussion with Central JCA Leaders. The Secretary level discussion was restricted to the Mail Network Optimization Project (MNOP) and lasted for one hour only. No settlement could be reached on the first item of the Charter of demands i.e; implemental of Speed Post hubs, 1^st Class Mails hubs and delivery hubs. The staff side demanded the Secretary, Department of Posts, to have full fledged discussion on all items of the charter of demands including the first item.

Yesterday (29.06.2011) there was a discussion with Member (Operations) on the same subject. No consensus could be reached in that meeting also. The Central JCA decided unanimously to intensify the strike preparations and ensure 100% participation of the employees in the indefinite strike. The entire Postal and RMS offices shall remain closed from 5^th July 2011.

The Central JCA call further calls upon on all Circle/Divisional/Branch Secretaries to organize protest demonstration in front of all offices on all days from 1^st July 2011.

RESTRICTED HOLIDAY (R.H) ON THE OCCASION BIRTHDAY OF SHRI GURU GOBIND SINGH TO BE OBSERVED ON 31st DECEMBER-2011(Click here for details)

CONFEDERATION CIRCULAR NO.12 DATED 28^TH JUNE, 2011

 

Dear Comrade,

 

            Kindly see our website. We have placed a copy of our letter seeking solidarity and support of our sister organizations and affiliates to the postal workers who will commence the indefinite strike action from 5^th July onwards.  We request all our affiliates and State Committees to organize Lunch –recess demonstration at the respective work spots on 5^th July, 2011.  The State Committees must ensure that a massive demonstration is organized at the CPMG offices of the State Capital eliciting participation of all CGEs on 8-7-2011 and send the following telegram/savingram to the Secretary-Post, Government of India, Dak Bhawan, New Delhi-110 001 as also to the Communication Minister. Shri Kapil Sibal, Hon'ble Minister for communications, 107, First Floor, Sanchar Bhawan, New Delhi-110 001.

 

                         "We express our solidarity with the striking Postal employees. Urge upon you

 

            To hold negotiations with the organizations and settle their demands."

 

            The affiliates may kindly issue necessary instructions to all their Branches to carry out the above programme.   Copy of the said communication may please be endorsed to the Confederation CHQ

 

            The National Secretariat of the Confederation will meet on 30^th July, 2011 at Chennai and the first meeting of the National Women's convention will also be held on the same day. Copies of notices are placed hereunder.

 

PFRDA Bill

 

            The Government could successfully introduce the PFRDA Bill in the last session of the Parliament with the help of the BJP and others in the opposition. The Bill might come up for discussion and enactment in the monsoon session.  In the wake of the attempt in this direction by the UPA-I Government,  we had taken the decision to organize a day's strike jointly with AISGEF, the School and University Teachers Federations and the AIDEF.  We have been in touch with all these organization for venturing into another serious campaign against the present Bill to culminate in an industrial action. Accordingly we have decided to hold a joint convention on PFRDA Bill at New Delhi on 22^nd July, 2011.  The venue of the convention will be :

 

M.P.C.U Shah Auditorium,

Shree Delhi Gujarati Samaj,

No.2, Raj Niwas Marg,

Civil lines, Ring Road,

New Delhi-110 054

(next to Civil lines Metro Station- Yellow Line)

 

            The convention will commence at 11-30 AM and shall be concluded at 3-30 PM. The convention have the participation of the representatives from AISGEF, Confederation, AIDEF, School and University teachers Federations, and DREU. Other details will be conveyed in our next circular. 

--
M.Krishnan
Secretary General NFPE

LIST OF HOLIDAYS DURING THE YEAR 2012 FOR CENTRAL GOVERNMENT EMPLOYEES… (CLICK HERE FOR DETAILS )

--
M.Krishnan
Secretary General NFPE

POSTAL JOINT COUNCIL OF ACTION

NATIONAL FEDERATION OF POSTAL EMPLOYEES

FEDERATION OF NATIONAL POSTAL ORGANISATIONS

ALL INDIA POSTAL EXTRA DEPARTMENTAL EMPLOYEES UNION

NATIONAL UNION OF GRAMIN DAK SEVAKS

NEW DELHI – 110001

No. JCA/Postal/2011 Dated : 28.06.2011

To,

___________________

____________________

____________________

Sir,

Sub: Indefinite Postal Strike from 05^th July-2011.

The Postal Services in India is the biggest in the world, with a tradition of serving the people of this country for the last 150 years. There are about 1,55,000 Post Offices , 392 Railway Mail Service Sorting Offices. Collection, Processing, Conveyance and delivery of Postal articles including Speed Post , Registered Post, Parcels, Periodicals, Ordinary letters etc. is the main function of the Postal Department. In addition to this the INDIA POST is running the largest Bank called Post offices Savings Bank and also Postal Life Insurance including Rural Postal Life Insurance, as the agency functions of the Finance Ministry, Govt. of India. There are about 5,50,000 employees working in the Postal Department out of which 3,00000 are Gramin Dak Sevaks mostly in the rural Post Offices.

The Postal Joint Council of Action comprising National Federation of Postal Employees (NFPE) , Federation of National Postal Organizations (FNPO), All India Postal Extra Departmental Employees Union (AIPEDEU) and National Union of Gramin Dak Sevaks(NUGDS)' representing 95% of the employees, has decided to go on Indefinite All India Strike from 5^th July 2011. The Bhartiya Postal Employees Federation (BPEF) affiliated to BMS has also given separate notice for indefinite strike from 6^th July, 2011. The memorandum regarding the decision for indefinite strike was given to the Secretary, Department of Posts, on 20^th April, 2011 it self and the formal Strike Notice was served on 14.06.2011.Three rounds of discussions with Secretary, Department of Posts, took place on 06.06.2011, 07.06.2011 and 27.06.2011, but failed due to the adamant position taken by the Postal authorities.

The Postal Board has appointed the Chicago-based multi-national Consultancy called Mckinsey for optimizing the mail network of INDIA POST. The Department has now started implementing the Mail Network Optimization Project (MNOP) recommended by the Mckinsey. As a first step speed Post hubs are introduced. As per this scheme the existing 315 National Speed Post Centres (NSPC) has been reduced to 89 speed post hubs. Speed post articles booked for delivery in the same district or nearby districts are unnecessarily

dispatched to hubs situated hundred of miles away for processing. From there articles are again back-routed to the delivery post offices. This has resulted in heavy delay in transmission and delivery of speed post articles. Articles which are delivered on the next day earlier are now delayed for 2 to 5 days. Time bound and speedy delivery could not be ensured and this has resulted in erosion of the customer faith in the Postal services which in turn has resulted downfall in the number of speed post articles booked and also in the revenue realized through speed post.

In-spite of the failure of the Speed Post hub experiment, the department is not ready to revert back to the old system. Instead the Postal Board now proposes to introduce hub system for first class mails including registered articles and also for delivery. The existing 366 mail sorting offices are to be closed and 89 first class mail hubs are to be introduced, just like speed post articles first class mails including registered articles of 5 or 6 revenue districts are to be pooled in hubs situated hundreds of miles away and from there they are processed and back-routed for delivery. Similarly the delivery of letters in urban areas at present done from town sub post offices are to be withdrawn and it will be concentrated in delivery hubs. The department also issued instruction to all Chief Postmaster Generals for closure and merger of 9797 urban post offices in the name of optimization. The introduction of first class mail hubs, delivery hubs and closure of offices will further aggravate the delay in transmission and delivery of postal articles and curtailment of postal facilities to the public. Naturally public will loose their faith in the postal services and will be compelled to depend upon courier services.

The JCA has demanded the Postal Board to roll back the speed post hubs and also to reject the proposal to introduce first class mail hubs and delivery hubs and stop closure of offices. But the Postal Board has taken an adamant stand and is unilaterally going ahead with the implementation of Mckinsey recommendations.

The JCA has also demanded the Postal Board to concede the legitimate sectional demands of the Gramin Dak Sevaks, Casual Labourers and other cadres of the Postal department such as Postal Assistants, Sorting Assistants, Postmen, Mail guard, Multi-tasking Staff, System Administrators, PO & RMS Accountants, Postal Accounts Employees, Administrative Staff, SBCO Staff, MMS and Civil Wing employees. The 25 point Charter of demands submitted to the Secretary, Department of Posts, is enclosed herewith

As employees of all the Federations and Unions irrespective of their union affiliations are participating in the strike, the entire postal services will be paralyzed from 5^th July, 2011.

We earnestly solicit your support for the justified demands of the Postal employees and intervention at Government level for settlement of the demands raised in the Charter of Demands.

Yours Sincerely

M. Krishnan Secretary General, NFPE	D. Theagarajan Secretary General, FNPO
S. S. Mahadevaiah General Secretary AIPEDEU	P.U.Muralidharan General Secretary GDS – NUPE

--
M.Krishnan
Secretary General NFPE

FLASH NEWS

POSTAL JOINT COUNCIL OF ACTION

NATIONAL FEDERATION OF POSTAL EMPLOYEES

FEDERATION OF NATIONAL POSTAL ORGANISATIONS

ALL INDIA POSTAL EXTRA DEPARTMENTAL EMPLOYEES

NATIONAL UNION OF GRAMIN DAK SEVAKS

NEW DELHI – 110001

DISCUSSION WITH POSTAL BOARD AGAIN FAILED

DEPARTMENT ADAMANT ON IMPLEMENTING McKINSEY RECOMMENDATIONS

CENTRAL JCA DECIDES TO GO AHEAD WITH THE STRIKE

The third round of discussion held with the Postal Board today (27.06.2011) at 3 PM also failed due to the adamant position taken by the Department. Ms. Radhika Doraiswamy, Secretary, Department of Posts, Sri. P. K. Giopinath, Member (Personnel), Mrs. Manjula Parashar, Member (Operations), Sri. Kamaleshwar Prasad, Member (HR) and other Senior Officers were present. Staff side was represented by Secretary Generals, NFPE, FNPO and other General Secretaries.

Immediately on commencement of the meeting the Staff Side expressed its strong resentment and protest against the decision of the Department to go ahead with the Mckinsey recommendations regarding Mail Network Optimisation Project. The Staff side demanded that the aleady failed experiment of speed post hubs should be withdrawn immediately and the decision to implement first class mails hubs and delivery hubs and closure/merger of offices should be dropped. After heated discussion for about two hours no consensus could be arrived on this important agenda of the Charter of Demands. Hence meeting ended with disagreement.

The Central JCA met after the discussion with Postal Board and took the following decisions: -

1. The JCA unanimously decided to go ahead with the strike decision.

2. Campaign and preparations at grass root level for the strike should be further intensified.

3. The indefinite strike shall commence at 6 AM on 05.07.2011

4. 100% strike should be ensured in all Branches/Divisions and Circles.

5. Strike shall not be withdrawn unless and until result – oriented settlement is reached on important items of Charter of Demands.

CLARIFICATION ON CHILDREN EDUCATION ALLOWANCE (Click here for details)

LTC 80 FARE LIST (1st JUNE -2011) * CLARIFICATION REGARDING REIMBURSEMENT OF LTC-80 FARE JOURNEY BY AIR WHILE AVAILING LEAVE TRAVEL CONCESSION - CLARIFICATION REGARDING. CLICK HERE FOR DETAILS

--
M.Krishnan
Secretary General NFPE

OPTIMIZATION  OR  LIQUIDATION?               The Mail Network Optimization Project (MNOP) has become Mail Network Liquidation Project (MNLP).  Implementation of the "Speed Post hub" experiment has resulted in reducing 315 National Speed Post Centres to 89 speed post hubs.  Introduction of the "First Class Mail hubs" will result in gradual extinction of 366 RMS Mail Sorting Offices.  Delivery hubs will further result in withdrawal of delivery from hundreds of Urban Post Offices.  The proposed closure or merger of 9797 urban Post offices will sound the death-knell of Post services.  Is it optimization or liquidation?             Department of Posts is paying Consultancy fees to Mckinsey and Mckinsey is not paying any money to the INDIA POST.  But the Mckinsey is behaving as if they have purchased the INDIA POST and are the real owner of it.  They are passing orders to the employees above the head of departmental officers.  Even Heads of Circles are bound to obey Mckinsey.  Voice of the    right-thinking employees and officers are suppressed and only those support Mckinsey are allowed to run the show.             Creation of hubs has resulted in abnormal delay in conveyance and delivery of speed post articles and everywhere back-routing is taking place.  Even articles meant for local delivery are unnecessarily despatched to the hubs situated hundreds of miles away and from there again back-routed to the delivery Post offices causing avoidable delay.  Speed post has lost its speed and the faith of public in this premium services has been shaken.  Number of articles and revenue has come down.  Still the authorities blindly go on repeating that it is a great success.  It is just like "operation is successful, but the patient died".  The introduction of the first class mails hubs and delivery hubs will be the "beginning of the demise of the Postal Services in India".

--
M.Krishnan
Secretary General NFPE

CONFEDERATION OF CENTRAL GOVT. EMPLOYEES & WORKERS.

24^th June: 2011      N O T I C E

 

                Notice is hereby given for a meeting of the Secretariat of the Confederation to be held at Chennai on 30^th July, 2011.  The meeting will begin at 11-30 A.M. The exact venue of the meeting will be communicated by the Tamil Nadu State Committee.  The meeting will deliberate upon the following agenda:

 

(a)    Review of the campaign programme if any undertaken to popularize the charter of demands.

 

(b)   To finalise the date for the next phase of programme of action.

 

(c)    The implication of deems taken at the Joint Covention on PFRDA Bill at Delhi on 22-7-2011.

 

(d)   Any other matter with the permission of the Chair.

 

            The first meeting of the women committee formed by the National women's convention at Kolkata will also be held at Chennai at the same venue.  The meeting of the women committee will begin at 3-00 P.M.  The convenor of the Committee will circulate the agenda for discussion in due course:

 

--
M.Krishnan
Secretary General NFPE

INSURERS GET SECOND CHANCE TO BID FOR CGHS PROJECT

 

            Insurance companies will get another opportunity to bid for the Union government's ambitious health insurance project, 'Central Government Employees and Pensioners Health Insurance Scheme'.

 

            The health ministry had earlier nullified last year's bidding process due to changes in the terms and conditions of the proposed scheme.

 

            ICICI Lombard General Insurance had won the bid last year to administer the health insurance project, meant for employees eligible for medical treatment under the Central Government Health Scheme(CGHS). It will have to apply afresh to qualify again.

 

            The decision will also allow last year's unsuccessful bidders such as Oriental Insurance, New India Assurance, United India Insurance, National Insurance, Cholamandalam Ms General Insurance and Star Health and Allied Insurance to try their luck again.

 

            Sources in the ministry said the decision to cancel last year's tender result was due to changes made in the list of beneficiaries, for whom the proposed health insurance scheme would be mandatory in the initial stages. The initial plan was to make health insurance mandatory for new recruits who join after the commencement of the scheme.

 

            It was also decided future pensioners, who retire after the scheme comes into force, should also be asked to be part of it. Later, after finalisation of the tender, the ministry decided to keep this option voluntary for future pensioners and make it mandatory for recruits.

 

            The change, officials said, would have resulted in a difference in the number of estimated beneficiaries and hence, the re-tendering exercise.

 

            The CGHS covers over 800,000 families, of which 500,000 are employees and 300,000 are pensioners, through its network of hospitals and clinics in 25 cities and towns across India. Since it has no presence in 10 states, it does not cover all the 3.2 million eligible families. With the government deciding to put a cap on its annual spend of Rs 1,600 crore, there is no alternative funding mechanism to turn health coverage inclusive. The new health insurance scheme is considered as an attempt to make this possible.

            The new proposal, for which expression of interests will be invited from insurance companies in three months, is expected to cover seven lakh pensioners in five years.

 

            According to sources, ICICI had agreed to provide a Rs 5-lakh insurance coverage for each policy holder for an annual premium of Rs 1,500. The officials said the initial contract would be for three years and the insurance company that administered the programme would have the flexibility to seek a change in the premium amount every year.

 

Source : Business Standard

 

 

CENTRAL SECTOR SCHEME OF INTEREST SUBSIDY ON EDUCATIONAL LOANS

 

Ministry of Human Resource Development

 

            The Ministry of Human Resource Development launched during 2009-10 a new Central Scheme to provide full interest subsidy during the period of moratorium on educational loans for students belonging to economically weaker sections (with parental family income from all sources of less than Rs.4.5 lakh annually), from scheduled banks under the Educational Loan Scheme of the Indian Bank's Association (IBA). The loans are for pursuing of studies in professional/technical streams from recognized institutions in India, subject to a loan ceiling of Rs.10 lakhs.

 

            Under the Scheme, proof of income is required to be certified by authorities to be designated by the State Governments. Accordingly, the Ministry has written to all Chief Secretaries of States/Union Territories to intimate the designated authority/authorities (at the District/Sub-District/Block, etc. levels) to the District level Consultative Committee (DLCC) so that banking authorities at the branch level where students would be approaching for availing the scheme would be aware of the same. The eligible students may get the details of designated authorities from the concerned branch of the Bank where they have availed of loan.

 

            All Scheduled Member Banks of the IBA have also been advised to take necessary action to adopt and implement the Scheme so that the benefits of the Scheme accrue to the eligible students. Canara Bank is the Nodal Bank, for the Member Banks of IBA, for claiming reimbursement of interests to student accounts. The details of the Scheme as well as the above communication are available on the website of the HRD Ministry at www.education.nic.in.

 

            All eligible students who wish to avail of the benefits of the Scheme, are advised to approach the respective bank branch from where they availed of the education loan and complete the necessary formalities including obtaining the certification in respect of annual family income from the competent authority at the Block/Tehsil/District Level, so that the individual students accounts could be credited with he interest due on the Loans for the academic year 2009-10 onwards. Those who have already submitted such Certificates are not required to submit them again. The last day for submitting Certificates by students to respective branches is 20.07.2011.

 

Source: PIB

--
M.Krishnan
Secretary General NFPE

RESULTS OF PSS GROUP-B 2011 EXAMINATION HELD ON 29/05/2011 DECLARED BY THE DIRECTORATE ( CLICK HERE FOR DETAILS )

 

SALARIED TAXPAYERS WITH TOTAL INCOME UP TO RS.5 LAKH EXEMPTED FROM FILING INCOME TAX RETURN FOR ASSESSMENT YEAR 2011-12(CLICK HERE FOR DETAILS/PIB NEWS )

 

--
M.Krishnan
Secretary General NFPE

Confederation Circular Dated: 23rd June 2011

POSTAL STRIKE

Dear Comrade,

We write this to solicit your support and solidarity for the postal workers of the country who are preparing to go on indefinite strike action from 5^th July 2011 onwards. The National Federation of Postal employees (NFPE), All India Postal Extra Departmental Employees Union (AIPEDEU), the two affiliates of the confederation has under the banner of the Joint Council of Action with the Federation of National Postal Organizations (affiliated to INTUC) and the National Union of Gramin Dak Sewak(affiliated to INTUC) have served the Strike notice on 14^th June 2011 on the Postal Board. The Strike action will commence on 5^th July, 2011.

The Issues

1. Some time back, the Department of Post, appointed the World (in) famous Transnational Corporation, Mckinzey Consultancy to make recommendations to it as to the manner and methodology to be adopted to restructure the century old postal system of the country. While the avowed objective was to modernize the system and make it a profit making venture, the real intent was to reorganize the department in such a manner so as to equip itself viable for privatization/corporatization. Earlier the Postal Department had made several attempts to privatize its functions and in the process large scale outsourcing was also resorted to. With the prime objective of eroding the efficacy of the Postal department, various steps were undertaken like, closure of sorting units, cutting down the staff strength despite widening business ventures, pegging down the overtime rates by linking it to pre-1986 pay scales etc. Thrice the Government made attempts to introduce legislation in the parliament to grant license to courier service providers. The stubborn resistance of the M.Ps especially of the left parties and a few others in the parliament and the struggles organized by the employees at the work spot thwarted it successfully till date. However, systematically and meticulously the Department had been creating conditions whereby the customers moved away to patronize the private courier services, run illegally without any licence whatsoever. Surprisingly even Government Departments, which are to communicate with large number of people often became customers of such illegally run private courier service providers The Mckinzey consultancy who is yet to make its final report, has however, suggested certain measures in the name of Mail Network optimization project which the postal department has now decided to implement without causing any discussions whatsoever with any of the stake holders, especially the unions. Their suggestions include:

(a) Closure/merger of about 9797 post offices in the urban area

(b) Reduce the number of Speed Post Centre from 315 to 89.

(c) Reduce the RMS sorting centres from 412 to 84

(d) To redeploy the postman staff in the newly created "Delivery hubs"

2. The major chunks of the postal workers are Gramin Dak Sewaks or Extra-departmental Agents. The EDA was the system developed by the British Government to spread the postal communication system to far flung rural areas of the country. They were simply agents or franchisees and were appointed so for pittance of a remuneration. Their cause was taken up by the unions of regular employees, the NFPE and its constituents and the FNPO, in the post-independent era and through sustained struggles fetched them very many concessions, benefits and privileges and brought them nearly on par with the regular employees. When the 5^th CPC was set up in 1993, the Postal department was forced to appoint a Judicial Commission (The Talwar Commission) to go into the wage-structure and other service conditions of the Extra Departmental Agents, presently called the Gramin Dak Sewaks. The committee made far reaching recommendations, a good number of which the Government had to accept and implement, (except civil servant status and pension) thereby improving the lot of these employees considerably. However, the committee set up in the wake of the 6^th CPC, the Natarajamurthy committee headed by a retired Postal bureaucrat, ensured that the EDAs were reduced to casual part time workers reversing in the process, decisions taken on the basis of Talwar Commission suggestions. Most of the committee's recommendations were in sync with the neo-liberal economic policies. The rules governing their service conditions have now been unilaterally amended whereby they may not be even termed as "employees" hereafter. The very caption of the regulatory rules which was GDS-Conduct and Employment rules have now been changed to GDS- Conduct and engagement rules, reducing them to the status of a Contract Worker.

In the negotiations which took place on 6^th and 7^th June, 2011 the Postal authorities have stuck to their stand of implementing the decision to create Speed Post and First Class mail hubs, despite their inability to contradict the fact presented by the staff side that the creation of such hubs has resulted in abnormal delay in the delivery of articles benefiting the private operators. It has, therefore, become unambiguously clear that without organizing sustained struggles and eliciting the support of the entire section of the working people and garnering public opinion, the reversal of the decision would not come about. The undeniable fact that Government and the Postal department armed with the recommendation of the Mckency consultancy are determined to demolish the existing postal system in the country to pave way for the unhindered entry of private operators has to be defeated.

We therefore once again request you to extend your co-operation, support and solidarity to make the proposed indefinite strike successful to compel the Government to rescind their decision to act upon McKenzie recommendations in the Postal Department.

With greetings,

Yours fraternally

K K N Kutty.

Secretary General

PHOTOS OF JCA CONVENTION HELD AT CHENNAI ON 19.06.2011

ANNUAL MEDICAL CHECK-UP COST – INCOME TAX EXEMPTION

 

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICAT1ON

New Delhi, the 3rd June, 2011

            S.O.1295(E).—In exercise of the powers conferred by clause (23AAA) of Section 10 of the Income-tax Act, 1961(43 of 1961), the Central Board of Direct Taxes hereby makes the following amendments in the notification of Government of India, Ministry of Finance, number S.O. 672(E) dated the 27th July, 1995, namely :—

                in the said notification, in paragraph (1), after clause (c), the following clause shall be inserted, namely :—
(d) to meet the cost of annual medical tests or medical checkups of the member, his spouse and dependent children.
Source: www.incometax.gov.in
[Notification No. 33/2011/F.No. 197/12/201 0-ITA-I]
CLICK HERE FOR DETAILS - Direct Tax Laws

--
M.Krishnan
Secretary General NFPE

SEVEN TAX-EFFICIENT FINANCIAL SERVICES IN THE POST OFFICE

Priya Kapoor, ET Bureau

 

            When was the last time you visited a post office branch? It's been over a decade that the e-mail replaced the written word, so there's no need to buy stamps, envelopes or inland letters. Besides, thousands of private couriers have mushroomed in the past 15-20 years, giving stiff competition to speed post & parcel. But you should because the bouquet of services offered by India Post has some very interesting and cost-effective products. ET Wealth looks at the financial services that can be availed of at a post office branch and how these compare with similar products from other organisations.

            The interest your balance earns in a regular savings account with a bank is taxable. But if you open a savings account in a post office, the interest is tax-free. If you maintain an average balance of Rs 50,000 in your bank account, you would earn roughly Rs 2,000 as interest income in a year. In the highest tax bracket, the taxman will shave off 30% (or Rs 600) from this income, leaving you with only Rs 1,400. However, if it is a postal savings bank account, the interest earned is tax-free. There is, of course, a ceiling of Rs 3,500 per account on this exemption in a year. In case of joint accounts, the ceiling is higher at Rs 7,000 a year. But this is a reasonable limit because very few people would keep more than Rs 1 lakh in their savings account.

            There are other benefits of opening a postal savings account. You don't have to lock up Rs 5,000-10,000 in maintaining an average quarterly balance. The post office does not mind if you have emptied out your account as long as you leave Rs 500 as balance. This low-ticket convenience works in case of recurring deposits as well. If you open a recurring deposit with a bank, the minimum monthly deposit is Rs 500. In the post office, the monthly contribution can be as low as Rs 10, making it an ideal option to start your child on the savings habit. The 7.5% interest is compounded quarterly and compares well with what banks offer. The only hitch is that the post office deposit is for a minimum of five years. However, you can withdraw 50% of the balance after one year.

            Even so, the very mention of the post office conjures images of a stodgy organisation with long queues and obdurate babus filling up pass books manually. That's true to a certain extent, but things are fast changing. India Post is working on a core banking solutions project that will offer state-of-the-art facilities to customers, including ATMs, Net banking, debit cards and e-payment services. AS Prasad, deputy director-general (financial services), told ET Wealth that by the end of the year, account holders will be able to access their accounts at any ATM across the country ( India Post's AS Prasad on how it to transform into a dominant financial services player ).

            Life insurance is the lynchpin of a financial plan. The post office offers life insurance, but it is open only to employees of the Central and state governments, public sector undertakings and semi-government organisations. In October 2010, the Insurance Regulatory and Development Authority allowed the post office to sell insurance policies of private companies. It was a tremendous opportunity for both the insurance industry as well as India Post. The industry suddenly had access to India's largest distribution network of 1.55 lakh offices while India Post could stand to earn good commission from selling insurance policies. However, the proposal has not taken off because the India Post does not want to push policies of other companies and instead wants to focus on its own Postal Life Insurance. The Rural Postal Life Insurance can be bought by any citizen of India provided he is residing in a rural area, which is any location outside the limits of a municipality. India Post has sold 1 crore RPLI policies since they were launched in 1995. But almost 40% of these are micro insurance policies where the life cover is less than Rs 25,000. That's just enough to take care of a middle-class urban family for about a month.

            The India Post is also a distributor of the New Pension Scheme. You can open an NPS account at designated post office branches. In fact, with very few agents interested in selling the low-cost scheme because of the niggardly commission it offers, the post office has become the biggest seller of the NPS. It has opened almost 20,000 voluntary accounts till now, which is almost a third of the total voluntary Tier I NPS. The scheme is available at nearly 800 post office branches across the country. Incidentally, the India Post has stopped selling mutual funds after the entry load was removed in August 2009. Says Prasad: "If Sebi brings the upfront selling commission of 2.25% back, we would sign a memorandum of understanding to sell mutual funds again."

            Want to invest in gold? The yellow metal is set to soar higher as uncertainty returns to the capital markets and inflation goes through the roof. You can buy 24-carat gold coins at the post office. The coins are available in three sizes: 500 mg, 1.5 g and 8 g. Don't worry about the purity issues. These coins have been imported from Switzerland and have the backing of the World Gold Council. There is no price advantage if you buy from the post office or from a bank or jeweller.
At the post office, you can transfer money in the most cost-effective manner. It is an agent for a range of money transfer services, including wire transfers and international money orders. It issues travellers' cheques and offers 22 foreign currencies to those travelling abroad. It also offers prepaid forex cards in seven currencies, demand drafts in 11 currencies and wire transfer in 13 currencies. What's more, you can apply for your passport through the post office.

 

--
M.Krishnan
Secretary General NFPE