High cost of transacting trade
After low rank of 48th in Global Competitiveness
Index (GCI) and pathetic rank of 120th in ease of doing business, India again maintained its image of being difficult place for engaging in trade and business… India is again ranked very high in terms of share of transaction cost in doing business, in overall costs. India was placed at 11th spot, just behind Chile & China. Moreover, the average cost of executing a trade in India is estimated to be about 51 basis points (bps). As per data available from Elkins/McSherry, a New York-based global financial consultant, Venezuela was given the first slot, thus making it the most expensive market in the world. In case of India, average commission (or brokerage) was estimated to be about 30 bps which is considered very high when compared with emerging economies like China (22), Brazil (24), Korea (25) and Russia (15). India ranks nowhere compared to Brazil, Russia & China (BRIC nations). These continuous low rankings in various economic forums will not only degrade India’s image, globally, but will also de-motivate budding entrepreneurs from entering India.
These low rankings can be hurdle in the path of India economic progress. Reduction in brokerage charges can result in better ranking and make it easier for business to operate. Cost of transaction has direct bearing on trading volumes, volatility and competition and Indian investors are reeling under heavy STT rates and stamp duties. Its time for India to act... and act urgently...
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
After low rank of 48th in Global Competitiveness
Index (GCI) and pathetic rank of 120th in ease of doing business, India again maintained its image of being difficult place for engaging in trade and business… India is again ranked very high in terms of share of transaction cost in doing business, in overall costs. India was placed at 11th spot, just behind Chile & China. Moreover, the average cost of executing a trade in India is estimated to be about 51 basis points (bps). As per data available from Elkins/McSherry, a New York-based global financial consultant, Venezuela was given the first slot, thus making it the most expensive market in the world. In case of India, average commission (or brokerage) was estimated to be about 30 bps which is considered very high when compared with emerging economies like China (22), Brazil (24), Korea (25) and Russia (15). India ranks nowhere compared to Brazil, Russia & China (BRIC nations). These continuous low rankings in various economic forums will not only degrade India’s image, globally, but will also de-motivate budding entrepreneurs from entering India.These low rankings can be hurdle in the path of India economic progress. Reduction in brokerage charges can result in better ranking and make it easier for business to operate. Cost of transaction has direct bearing on trading volumes, volatility and competition and Indian investors are reeling under heavy STT rates and stamp duties. Its time for India to act... and act urgently...
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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