STRATEGIES TO INCREASE REVENUE OF THIRUVANANTHAPURAM

PETTAH PO– 695024 TO ACHIEVE THE

"BREAKEVEN”

PROJECT SUBMITTED BY : Team No. 2, A Section, Postmaster Grade I Induction Training, Postal Training Centre, Mysore-570010

(04.08.2014 to 06.09.2014)

INTRODUCTION

• Indiapost is the largest Postal Network with 1,55,015 POs of which 1,39,144 (89.76%) are in the rural areas. On an average, a PO serves an area of 21.21 Sq. Km and a population of 7175 people.

• Indiapost is still an inevitable organisation and is transforming into a technologically driven organisation by rolling out theproject of IT Modernisation.

Revenue expenditure analysis of INDIAPOST for the last 6 years (Rs. in Crores)

OBJECTIVE

Even though we are a part of Government of India, for a long time survival we must be self sufficient.

In this project, we are trying to discuss the various strategies to achieve “Break Even” by reducing the costs and by increasing the revenue.

PROFILE OF THIRUVANANTHAPURAM PETTAH PO

• This PO is a Project Arrow Office located 7 km from Thiruvananthapuram Central railway station in Thiruvananthapuram corporation area.

• It is in account with Thiruvananthapuram GPO in the administrative jurisdiction of Thiruvananthapuram North division in Kerala circle. The PO is functioning in a private building with FHR of Rs. 8000/- pm.

ESTABLISHMENT

PM Grade I PA Postman MTS GDSMP GDSSV GDS LB Peon

1 4 8 1 1 1 1

MAJOR CLIENTS/ORGANISATIONS

04 Hospitals, 02 Colleges, 05 Schools, 05 Temples, 04 churches, 02 mosques, 22 Financial and banking Institutions, 16 Central and State government Organizations, Big Market area surrounded by shops, lot of Traders and Entrepreneurs, 01 Railway station. This includes Passport Office, Railway Hospital, NCC Office, ESI Hospital, Kerala Kaumudi Daily, Kerala Poultry Development Corporation also.

TOTAL INCOME OF THE PO

• Total Annual income of Thiruvananthapuram Pettah PO Rs.17,33,434.20

TOTAL COST OF THE PO

• Total Annual Cost of Thiruvananthapuram Pettah PO is Rs.29,14,218.00

ECR• ECR is Expenditure Coverage ratio. The ratio of income to

expenditure of a post office to analyse the economic visibility of the PO.

• It shows how much expenditure is covered by the revenue earned by that unit

• Value can be less than 100 or more than 100• If <100: revenue is less than expenditure. (Loss)• If >100: revenue is more than expenditure (Profit)

59.48%

TARGET ALLOTED

Target Allotted for 2014-2015Postal Revenue 22 LakhsSB 450 Accounts per monthBD 5 LakhsWUIMT 500 per yearMoneygram 200 per yearPLI First Year Premium 6 LakhsPLI Renewal Premium 17 LakhsRPLI First Year Premium 1.5 LakhsRPLI Renewal Premium 2 LakhsMy Stamp 30 per year

• Breakeven is the point at which the Income and Expenditure of a Post Office meets together.

WHAT IS BREAK-EVEN OF PO ?

• Breakeven can be achieved by both methods of Cost reduction and increasing the revenue.

• For this year the cost is expected to increase on an average 7 %. So cost will be expected to reach Rs. 31 lakhs.

• We are expecting an ECR of 100 in a phased manner. So for this financial year, we are targeting ECR of 75. So we need to target additional revenue of Rs. 5 lakhs in next 6 months.

HOW TO ACHIEVE BREAK EVEN: COST REDUCTION & INCREASE IN REVENUE

As it is a Pure Government Organisation, scope for decreasing the cost is lesser. Eventhough we can adopt the following strategies in this regard. Possibilities for relocation of the post office with lesser rent area or to any Government buildings can be tried. Review of establishment may be carried out for justification of posts.

STRATEGIES FOR COST REDUCTION

MARKET SEGMENTATION

Various Segments

%

NRIs 21 %

Govt Employees 19 %

Business 12 %

House Wives/ Students

22 %

Retired/ Senior Citizens

9 %

Others 17 %

STRATEGIES TO INCREASE REVENUE

A. NRIs

i. International Money Transfer Services ii. International Mail & Parcels

B. GOVERNMENT EMPLOYEES

i. PLIii. Savings Bank Schemes

STRATEGIES TO INCREASE REVENUE

C. BUSINESSMEN

i. Logistics Postii. Express parcel and business parcelsiii. Direct Postiv. ePaymentv. Savings bank

STRATEGIES TO INCREASE REVENUE

D. RETIRED/SENIOR CITIZENS

i. SCSSii. MIS

STRATEGIES TO INCREASE REVENUE

E . OTHER STRATEGIES

i. Stop revenue leakagesii. Marketing traditional productsiii. ePayment biller IDiv. Internal marketingv. Cross Sellingvi. Motivation MPKBY/SAS Agents

STRATEGIES TO INCREASE REVENUE

ACTION PLAN

i. Reduce the Revenue leakages (Rs. 0.5 Lakhs)ii. International Money Transfer (Rs. 1.5 Lakhs)iii. International Mails (Rs. 1.4 Lakhs)iv. New accounts-2000 (Rs. 1 Lakh)v. PLI & RPLI (Rs. 0.6 Lakhs)vi. Other target areas

ePayment

Speed postStamp salesPD AccountsMy Stamp

CONCLUSION

• As per the Income Cost calculation, our office is having an Expenditure Coverage Ratio (ECR) of 59.48. During the next 6 months of the financial year, we are targeting to reach upto an ECR of 75. Thus we are expecting increase in ECR in a phased manner. So by next 3 years we are expected to reach the breakeven point.

CONCLUSION

• By adopting these strategies and making action plans for each post office according to their profile, all 1,55,015 Post Offices in the country can achieve “BREAKEVEN”.

• So we are expecting India post to reach the mission of technologically driven, socially committed and SELF SUFFICIENT organisation.

• Let’s jointly take India post to be the lifeline of INDIA

TEAM MEMBERS

1. Madhusoodanan Nair K (Roll No. 08)2. Rudran R (Roll No. 18)3. Sureshkumar M A (Roll No. 22)4. Mahesh E P (Roll No. 09)5. Prasad T K (Roll No. 15)6. Renjith M S (Roll No. 17)7. Venkatesh S (Roll No. 23)8. Sudheesh V C (Roll No. 20)9. Beena K (Roll No. 04)10. Prabha P N (Roll No. 14)11. AnupamaKrishnan I (Roll No. 02)12. Sabareesh C C (Roll No. 19)13. Manu V R (Roll No. 11)

Any suggestions ?