India Post to be transformed as 'large public logistics organisation'

In the Union Budget presented today (February 1, 2025) in Parliament, Finance Minister Nirmala Sitharaman announced plans to transform India Post into a large public logistics organization. This move aims to boost the rural economy, with 1.5 lakh rural post offices set to play a key role.

Sitharaman stated that the Indian Post Office network, supported by the Indian Post Payments Bank and 2.4 lakh dak sevaks, will act as a catalyst for the rural economy. This transformation will facilitate serving the needs of various groups, including women, entrepreneurs, and self-help groups. A Dak Sevak is a postal employee, typically in rural areas, responsible for delivering mail and providing postal services to local communities.

In a recent interview with ITLN, Amitabh Singh, Chief Post Master General, Maharashtra Circle, stated, “We're supporting women entrepreneurs in rural areas through a partnership with the Maharashtra government's Mahila Arthik Vikas Mahamandal, providing logistical services and credit facilities to help them produce and market their products. We're also facilitating exports through our 1,000 Daak Niryak Kendra centres, offering free documentation and customs clearance services to MSMEs and export-related businesses. We currently handle exports up to a value of ₹1 lakh, although this limit is being revised shortly, and weighing up to 20-30 kilos, primarily smaller to mid-sized parcels."

He also mentioned how they are transforming into a logistics-focused organisation and that the future growth trajectory looks promising. With the growing economy and high growth trajectory of the logistics industry, they plan to expand their services beyond low-weight categories to include 30-100 kg logistics. They are also investing heavily in technology, infrastructure, and warehousing to prepare for the anticipated growth, which could result in a 20- to 50-fold increase in their logistics business.

The minister presented her eighth straight budget, outlining the government's plan to enhance credit guarantee cover for micro, small, and medium enterprises (MSMEs) to improve credit access.

Additionally, Sitharaman announced the enhancement of investment and turnover limits, recognising the significant contribution of MSMEs to India's exports. The Indian Post Payments Bank will also be expanded, with over 1,000 branches set to be established in the North East.