Govt to fast-track export clearances: Scindia.

New Delhi: Exporters hit by the world trade contraction can look forward to a helping hand from the government, which is determined to speed up steps to cut their transaction costs—by $10-15 billion or 7-10% of the value of India’s merchandise exports—the minister of state for commerce and industry Jyotiraditya Scindia told FE. A plan of action is underway for reducing the time lost by exporters in the maze of bureaucracy and virtual monetisation of the time so saved, the minister said in an interview.

A committee chaired by Scindia and comprising multiple agencies that exporters interact with would work across various verticals to identify areas where transaction costs can be cut. “We are in the process of doing in-depth studies,” Scindia said.

The agencies that an exporter needs to approach between his signing a contractual agreement with the buyer abroad and delivery of goods are multifarious (the DGFT, Customs, airport and seaport authorities, railways, export promotion councils, state government departments, quality control agencies, banks and the like.). Hundreds of documents are to be produced before these agencies. It takes 25-40 days for the exporter to complete the procedures, not to mention the “additional monetary costs” (read corruption).

In recent months, as part of the measures to obviate multiple clearances, the government introduced a system of electronic data exchange between DGFT and Customs in certain sectors.

The system would be fully functional, by including all agencies and sectors, by June 2010, an official source said.

The recommendations of the Scindia committee would go much beyond these and produce a list of doable actions in the next 2-3 months to facilitate fast-track clearances and simplified procedures.

“A rough ballpark number of transactions costs that we would be able to reduce is in the range of $10-15 billion,” Scindia said.

The government is in the midst of identifying departments where transaction delays occur. Scindia said the report, once ready, would be sent to various stakeholders. “All stakeholders, whether industry or ministries, would be consulted for facilitating the process of cutting transaction costs,” he added.

However, Scindia said the committee would only look at cutting the transaction costs and not entertain individual pleas for tax cuts and other fiscal incentives. “Issues of redundancy, latency and multiplicity of regulations that complicate the life of an exporter are being identified. It is the job of the government to do away with these and make the system hassle-free for exporters,” Scindia He said often exporters have to fill forms across various government departments, which can be very time-consuming. “So the question is how can we reduce that time and make sure that the exporter becomes more competitive in the global market,” he said.

After 13 months of negative growth consequent to the economic recession in developed countries, India’s exports started looking up from November, with an year-on-year growth of 18.2%. The exports grew 9.3% and 11.5%, respectively, in December and January. However, cumulatively, in the period April 2009-January 2010, overall exports stood at $132 billion, a dip of close to 18% compared to the same period in the previous year when exports stood at $160 billion.

Source : Financial Express