Union Budget 2025-26 and India Post

The Union Budget 2025-26 is anticipated to include an additional financial package aimed at transforming India Post into a more customer-centric and digitized logistics organization, according to a government official.

Financial Discussions and Allocations

• Recent high-level meetings between the ministries of finance and communications discussed India Post's capital expenditure requirements.
• The Finance Ministry allocated Rs 25,378 crore to the Department of Post (DoP) for 2024-25, a 1.68% decrease from the previous year's Rs 25,814 crore allocation but a 21% increase from the 2022-23 allocation.

Infrastructure Development and Customer Satisfaction

The support aims to build relevant infrastructure and ensure customer satisfaction through effective services. The government remains optimistic about India Post's growth despite not specifying the quantum of additional assistance.

Expansion of Banking Services

• Union Finance Minister  announced plans to expand banking services in the northeastern states with over 100 new branches of India Post Payments Bank (IPPB).
• IPPB, launched in 2018 with 100% government equity, saw 26.8 million accounts opened in the current year, with 59% held by women and 77% located in rural India.

Government Schemes and Mandates

• IPPB supports various government schemes like MGNREGA, PM Kisan, Pahal, and others.
• Received mandates from major government agencies including Employees Provident Fund Organisation and Reserve Bank of India.

Expenditure Breakdown

• DoP's actual expenditure was Rs 22,015 crore in 2022-23, and revised expenditure was Rs 24,389 crore in 2023-24.
• Revenue expenditure, mainly for salaries and pensions, comprises over 95% of the budget at Rs 24,115 crore.
• Remaining Rs 1,262 crore allocated for capital expenditure, primarily on IT modernization (Rs 748 crore) and IPPB (Rs 250 crore).

Additional Industry Insights

• Industry seeks tax relief, capex boost, and reforms at pre-budget meetings.
• CII calls for a reduction in fuel excise and suggests consumption vouchers to boost demand.
• Reports indicate potential income tax rate cuts to enhance consumption.
• Steel ministry suggests increased customs duty to counter Chinese market threats.
• NATHEALTH urges the government to address healthcare gaps in the upcoming Budget.