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By Vibhuti Agarwal and Eric Bellman 

NEW DELHI -- Indians are enduring one of the strictest coronavirus lockdowns on the planet, with many unable to leave their homes for well over a month now. To get them through, many have turned to a surprising place like a forgotten friend: the post office.

India's 400,000 postal workers have become unlikely front-line fighters against the economic and psychological ravages of the coronavirus, assisting consumers, companies and even the government.

They are stepping up to deliver medicines, medical equipment and even food and cash to millions of homes -- in part because they are the only ones allowed. Private-sector alternatives, including delivery giants such as Amazon.com Inc. and Walmart Inc.-owned Flipkart, have been so restricted they have largely closed down for now.

Tabassum Hashmi, 76, who lives off the pension from her husband who died two years ago, is grateful that India Post has begun home delivery of the 22,000 rupees that usually goes directly into her bank account. These days she is too worried about getting the virus to leave her home to retrieve the money.

"When lockdown was announced, my biggest anxiety was I wouldn't be able to withdraw the pension. But it took just one phone call to the postmaster for my pension to get delivered to my home," she said. "Post offices are doing a great job, especially during these difficult times."

Amid the world's biggest pandemic lockdown there are other signs the state is making a comeback.

India, whose government once wielded a heavy hand over industries the country's first leader referred to as the economy's "commanding heights, " had been slowly paring back its public sector for decades. But suddenly state-run dinosaurs thought to be in the way of efficiency and productivity are back in the limelight. And, for the moment at least, many Indians are relieved to have their resiliency and flexibility.

"We have tried to fill the gap," said Pradipta Kumar Bisoi, secretary of the Department of Posts. "So we are going to the doorsteps of the people to deliver their mail and their money, also, and their social benefits."

The national railway service, among the world's largest, is shut down. But profitability was never its main goal. Its one million employees and workers are helping deliver essential cargo and railway cars have been transformed into quarantine units.

Some economists worry about governments going overboard.

"Governments around the world are reclaiming the commanding heights of the economy," said Vivek Dehejia, an economics professor at Carleton University in Ottawa. "You can do things quickly, but the danger is once governments obtain more power they are very reluctant to give it up."

Others point out there could be advantages even after the economy restarts.

In a recent report, the World Bank said India's largely state-owned banking industry, long considered a liability, could now be what it called a "cursed blessing." As India looks to come out of the downturn, the banks give New Delhi more ability to expand and steer new lending to get the economy back on track, it said.

"Their lending can be countercyclical, and they are more likely than private banks to provide services to people in remote areas and poor people," the April report said. "That is an opportunity in the current crisis."

The world bank report said more than 60% of bank assets are owned by public banks in India. That is more than four times the world average. While this state ownership leads to some politically motivated lending decisions, in tough times that same pressure to lend helps economies get back on their feet sooner as private-sector lenders aren't lending as much as they should.

The report said state-owned banks continued to lend during the 2007 financial crisis and regions and companies more dependent on state-run banks bounced back sooner.

India Post is the epitome of India's dormant public sector. With more than 150,000 branches, India has the largest post-office network in the world. It was built to serve every corner of the South Asian nation but has long been a liability, losing money regularly. It has been forced to maintain even tiny post offices to serve citizens. It lost more than $1.5 billion in the year through March 2019.

India Post and its predecessor, which was part of the British East India Co., controlled most mail delivery for centuries. The British East India Co. established the first postal stations in Mumbai in the late 1600s and in Kolkata in 1727. It later started regular service between the two cities with runners who carried spears with bells attached to ward off wildlife.

Since India opened its economy to more competition in the 1990s, hundreds of private couriers have eaten away at India Post's business as well as diminished the prestige of being a postal worker.

Now it has what few of its competitors can match -- clearance to stay open and for its employees to go to work. Local authorities have been so vigilant about keeping people off the streets that Amazon and Walmart had to shut down most of their deliveries in the first weeks of the lockdown. Their deliverymen were getting arrested. India Post didn't have that problem.

India Post's courier competitors can't deliver. They depend on commercial flights and trains, which aren't running, their truck fleets aren't allowed on their roads and their employees can get to work.

The post office has started a special service to deliver medicines. Nongovernmental organizations are turning to the post offices to bring food to migrant workers, stranded in the cities with no work. India Post is the default bank of the masses and has more than 300 million accounts, many of which are now receiving government handouts. The postal system is making about 200,000 cash deliveries a day to people's doorsteps, around 10 times the number before the lockdown.

The lockdown was scheduled to end Sunday, but most of the restrictions will remain, particularly in the big cities. Amazon, Walmart and other e-commerce companies complain they still have their hands tied as they are only allowed to deliver food to most locations, making it difficult and expensive to crank up deliveries.

The post office branches in New Delhi say that about half the workers are still staying home -- due to a lack of public transportation -- but they are ready for new responsibilities.

Ravi Kumar, a postal worker for 20 years, says he feels new purpose and is going out of his way to deliver food and medicines to people on his route who have been calling.

"Someone has to come out and help and make the system work," he said. "It feels like the old times again back when people used to look up to us."

India Post made an inspirational video to let India's 1.3 billion people know it was open for business. Postal workers, wearing masks and rubber gloves and armed with multiple hand sanitizers, are shown serving citizens, then holding up signs.

"WE ARE THERE FOR YOU! CORONA OR NO CORONA!" read one of the signs.

Write to Vibhuti Agarwal at vibhuti.agarwal@wsj.com and Eric Bellman at eric.bellman@wsj.com

(END) Dow Jones Newswires

May 03, 2020 18:55 ET (22:55 GMT)

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