The Indian Economy Blog

April 21, 2006

A Monopoly Reappears

Filed under: Miscellaneous,Regulatory reforms — Amit Varma @ 5:33 pm

The Telegraph reports:

The next time you need to send an urgent letter, you may have to depend on snail mail.

The government today proposed amendments to the Indian Post Office Act, 1898, banning private courier companies from carrying letters weighing less than 300 gm.

The private courier industry is livid, but the government’s defence is that it needs this monopoly to be able to fund cheap postal services in remote areas.

Well, I googled for and found the text of the Indian Post Office Act, 1898, and I think it is a monstrosity: It establishes a monopoly, deprives us all of choice as to how we want to send our mail, and prevents would-be entrepreneurs from setting up shop in this area.

Indeed, I believe that if the act was entirely scrapped, the objective that the government cites — cheap postal services in remote areas — would be far more quickly achieved. Enabling private enterprise will achieve far more than stifling it, and I know — duh! — that’s stating the obvious. But too many people still don’t get it.

1 Comment »

  1. The Govt should be obliged to apply Precautionary Principle to its proposals.
    Let them show nobody would be harmed.

    Comment by Vishal — April 22, 2006 @ 10:52 am

  2. Got an update in the papers that says the Govt. will eventually scrap the monopoly by gradually reducing the range of the monopoly down from the current 300 gm limitation. There is no time line as yet!

    Comment by little Ram — April 23, 2006 @ 9:40 pm

  3. Internationally too, national postal systems have a monopoly in courier upto weight of 2-3 A-4 sheets. This is more logical n reasonable. Indian post is trying to move towards this, but 300g is ricdulously high.

    Comment by lucky — April 24, 2006 @ 7:53 am

  4. ‘markets in everything’ ala marginal revolution.

    300g bundles of old newspaper, chopped and sized to suit an envelope.

    Comment by prakash — April 26, 2006 @ 11:44 am

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