Postal revenue deficit may touch Rs 1628 cr: Survey

NEW DELHI: Projecting a deficit of Rs 1,628 crore in the postal services in 2004-05, the pre-budget Economic Survey on Friday said the mechanism and the size of the subsidy constitutes an important policy question while outlining a ''redefined'' role of Indian postal network in the modern day communication and computerised environment.

"User charges in the postal system cover only 78.3 per cent of costs. There is a significant subsidy element. With the merger of 50 per cent of DA with basic pay in May last year and related enhancements, the deficit is likely to increase to Rs 1628 crore in 2004-05, the Economic Survey said on Friday.

The deficit had earlier declined to Rs 1354 crore in 2003-04 from Rs 1550 crore in 2000-01.

"Clarifying the rationale, the mechanism and the size of the subsidy constitutes an important policy question at this juncture", it said.

Lauding the roles of Department of Post, the Survey said it is among the world''s largest network in terms of area covered and population served. It currently provides 38 services and the Post Office Savings bank is the largest bank in India in terms of network, accounts and annual deposits.