The forthcoming general elections, especially in the uncertain political atmosphere, are not giving courage to the Federal Cabinet for taking bitter decisions which could ultimately hurt its reputation.
The latest case of the Cabinet''s hesitation in taking bitter decisions was a proposal of Communication Ministry for increasing inland postal tariff which, according to the Ministry, would not have had any negative impact on the general public.
Sources said that the Cabinet did not accord approval of up to 33 percent increase in inland postal tariff despite substantial justification given by Communication Secretary. The Ministry argued that increase in inland tariff was necessary because the actual postage expense on an ordinary letter is Rs 8 whereas the government is subsidising these rates.
Moreover, according to Ministry, the department was maintaining 9000 uneconomical post offices in rural areas through cross subsidy to meet its community service obligation. It was further explained that the proposed increase was not a tax but a fee to be paid by only the user of the postal service.
"The Cabinet deliberated upon the various aspects of the proposal, and the consensus view was that timing for the increase was not opportune," sources said. The Ministry had stated that from January 1, 2008, the Universal Postal Union would increase handling charges on foreign mail, and the department would have to pay more subsidy to the international operators.
"If its income is not increased in domestic level, how it would pay the subsidy," the Ministry questioned. Sources said that when the Ministry felt that immediate increase in inland tariff was not allowed, it tried to seek approval in increase now for implementation from January 1, 2008, which was also rejected.
Prime Minister Shaukat Aziz, who was chairing the meeting, directed Pakistan Post Office Department (PPOD) to improve postal service, open at least one post office at the Union Council level and run all services on professional lines.
He also asked PPOD to submit its business plan and introduce new services and products in line with international best practices so that the people, particularly those living in rural areas, get benefit from all the necessary services including postage, money order, banking, life insurance etc.
Sources said that though Pakistan Post has become a surplus earning department from 1999-2000, yet the existing level of its surplus earning is not sufficient to absorb the additional burden due to increase in pay, allowances and pension benefits granted by the government to its employees from time to time.
The financial data of PPOD showed that during 2004-05, the department was earning approximate surplus revenue of Rs 112 million, which shrunk to Rs 20 million due to revision of pay scales during 2005-06.
The Communication Ministry in its proposal had argued that with 15 percent increase in the salary of government employees from July 1, 2007, the surplus revenue of PPOD would decline into negative balance, and added that other courier services, like TCS, OCS and SMS, were charging much more than PPOD rates of different items, ranging from 1 to 5 kg. It may be mentioned here that postal tariff was last revised in March 2001.
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