The Hindu : Business : Assocham opposes curbs on couriers

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Saturday, Feb 11, 2006

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Assocham opposes curbs on couriers

Special Correspondent

Centre's proposal will undermine labour-intensive sector

GRASSROOTS SERVICE: A courier service run by self help groups (SHGs) in Coimbatore. — File photo

NEW DELHI: Strongly opposing the move of the Department of Posts (DOP) to ban private courier companies from delivering packets weighing less than 500 gm, the Associated Chambers of Commerce and Industry of India (Assocham) on Friday said this step would inflict a fatal blow to the Rs. 5,000-crore express industry employing over 500,000 people.

"The government move to safeguard the DoP from competition is against the spirit of the free market and entrepreneurship. Besides, this retrograde step will be the death knell for the highly labour-intensive service sector," Assocham President, Anil K. Agarwal, said in a statement here.

It would also mean higher cost for a monopolistic sub-quality service, he said.

Nearly 50 per cent of the revenue of the courier firms comes from carriage of packets weighing less than 500 gm. At present there are more then 2,500 big or small courier firms with a turnover of around Rs. 5,000 crore and an annual growth rate of around 30 per cent. It has become one of the fastest growing sectors of the economy.

Mr. Agarwal said there was no justification whatsoever to amend the Indian Office Act to ban the courier firms from delivering small packets.

The private courier industry operating for more then 20 years was known for its friendly staff, accountability and highly customised services combined with the ability to continuously track the letters through mail, fax and even SMS, he added.

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