Improving ease of doing biz: Govt to identify what's slowing cargo movement

The government is conducting a nationwide study, the first of its kind, to identify bottlenecks in cargo movement, in a bid to improve trade and Ease of Doing Business ranking.

The study will be based on surveys. It will look at causes of delays in movement of consignment caused by regulatory constraints, logistical issues in supply chains, or lack of infrastructure.

The Central Board of Indirect Taxes and Customs (CBIC), under the Department of Revenue, is carrying out the study.

A government official aware of the development said, “In most cases, it is not the regulatory framework that causes delay but logistical and infrastructural issues.”

He added, “So far, our action has been directed only towards regulatory issues such as food safety and quarantine, but this study will broaden our efforts.” 

An insight study had revealed only 20-25 per cent of the time taken for cargo movement is because of regulatory processes. Seventy-five per cent is because of other reasons. 

Infrastructure issues such as storage space constraints, lack of connecting roads, and traffic congestion add to the time taken for cargo movement. The government wants to identify and rectify these. It also wants to see if there are logistical issues such as rail and terminal operations, besides cases of importers not paying dues to shipping lines. 

Surveys are being conducted simultaneously across 15 ports — sea, air, land and dry — that account for 81 per cent of bills of entries for import and 67 per cent of shipping bills for export.

Greater standardisation is likely to benefit export-oriented industries and micro, small and medium enterprises the most. From August 1 to 7, surveys were conducted for sea port and inland container depots. For air cargo, the survey will be conducted in the first week of September.

The government will be able to identify laggard ports, sectors and officers, and come up with targeted policies to improve performance. 

According to World Bank standards, sea consignments must get cleared within 48 hours and air consignments within 24 hours. On an average, India takes 105 hours for cargo clearance.

The Department of Revenue plans to carry out this study on an annual basis. 

India has presented to the World Bank a unique “red, amber, green” model to promote quick customs clearance, strengthening the case for improvement in Ease of Doing Business rankings. It aims to be among the top 50 nations this year.

With the introduction of the “nudge model”, the customs department is able to visually track the performance of officers, jurisdictions, ports, brokers and sectors in real time across the country through a color dashboard. Green indicates clearance of cargo within the World Bank’s stipulated period and red a significant time overrun. 

With 13 reforms, India was among the 10 top improvers in the last year’s Doing Business study. India had reduced the time and cost to export and import through various initiatives.