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 for the current year as it aims to get into the top 50.
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 colour dashboard, blinking red, amber and green.
Green indicates clearance of cargo within the World Bank’s stipulated period and red a significant time overrun. The model was introduced in January to track the performance of ports, and drilled down to cover officers by May.
India’s rank had improved to 77 last year, a leap of 23 positions, and on the “trading across borders” criterion, it improved to 80, a jump of 66 places.
The move will help the government to identify laggard ports, sectors and officers, and come up with targeted policies to improve performance.
The model was presented to the World Bank in its meeting with Indian policymakers for inputs for the upcoming Doing Business report in October.
“The ‘nudge model’ will help the government introduce an element of competition among customs officers, ports and jurisdictions, sensitising them towards better performance,” said a government official. He added that based on data collation, an action plan would be drawn up to ensure that sea consignments got cleared within 48 hours and air cargo within 24 hours.
Nudge is a concept in behavioural economics, proposing positive reinforcement and indirect suggestions as ways to influence the behaviour and decision making of groups or individuals.
According to World Bank standards, sea consignments must get cleared within 48 hours and air consignments within 24 hours.
India, on average, takes 105 hours for cargo clearance. On the dashboard, sea consignments that cleared within 48 hours blinks green against the officer, port, sector and jurisdiction, amber up to 72 hours, and red beyond that.
Similarly, for air, it is green up to 24 hours, amber up to 48 hours, and red beyond that.
“We will be able to visually identify those officers and jurisdictions that are mostly in red and figure out factors behind that. A few sectors which are high-risk will be in red as they go through examination by the customs officers,” said another official.
A Central Board of Indirect Taxes and Customs (CBIC) initiative, the department has asked the World Bank if any country would like to emulate the model.
“It is a first-of-its-kind initiative anywhere in the world,” said the official.
A national time release survey will be conducted to use the data collected through the dashboard, measuring cargo clearance time at 16 selected customs stations.
With 13 reforms, India was among the 10 top improvers in last year’s Doing Business study. India had reduced the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers and the upgrading of port infrastructure and allowing an electronic submission of supporting documents with digital signatures.