Second Task Force on Transaction Cost to submit report in 4-5 months, says DGFT

Second Task Force on Transactino Cost in Exports was constituted to look into various processes, gather information from various associations related to procedural complexities; 3 meetings have been held so far

The second task force constituted by the Central government to identify reasons for high transaction cost in exports and suggest guidelines for removal of procedural complexities, is expected to submit its findings in four to five months, said Anup K Pujari, Director General of Foreign Trade (DGFT), who heads the task force. Reducing the transaction cost is one of the measures to help exports in the country grow.

 

The DGFT, in the sidelines of an open forum on operational issues relatd to FTP and Customs, by Federation of Indian Export Organisations (FIEO), said that the 2nd Task Force on Transactionn Cost in Exports was constituted to look into various processes and gather information from various associations related to the procedural complexities and three meetings has been held so far.

 

"The task force has to submit the findings in six months from the time of formation, which ends in October. We are working on the issues and expect to conclude by November of December," said Pujari.

 

The Ministry of Commerce and Industry has announced formation of the task force in April, 2013 and the DGFT has issued a trade notice in May 20, announcing constitution of th 2nd Task Force on Transaction Cost under the chairmanship of DGFT to identify reasons for higher transaction cost in exports and to identify areas where Indian exporters face administrative impediments that lead to increase in transaction cost. It also has to compare procedural complexities in exports between India and its major competitors.

 

The task force is also expected to suggest guidelines or steps for removal of procedural complexities drawing from the global best practices and to move towards transparent and increasingly paperless processing through digital platform, according to the trade notice.

 

Addressing the exporters in the open forum, Pujari said that this is one of the three ways in which the DGFT can act on to improve exports.

 

The three ways to help exports to grow include steps to improve infrastructure - like better road and electricity facilities, availability of land, water and other amenities - and the cost of financing. The third and the only way in which the DGFT could act on improving the exports is to reduce the transaction cost, which is the cost of doing business.

 

Speaking about the exports industry, he said that the small and medium entreprises are contributing only 12 per cent of the quantum of exports from the country, while they provide the largest employment and they are the section which need the help of the government.

 

Of the top 100 exporters contribute to the 28 per cent of the country's exports, the top 600 contributes to 46 per cent of the exports and the major 2000 exporters contribute to 66 per cent of the exports. The 10,000 major exporters contribute to 88 per cent of the exports, while the number of active exporters in the country is around 1.11 lakh, last year. It leads to the conclusion that almost one lakh exporters contribute to the 12 per cent of the exports of the country. This section require help for further growth, he added.