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t’s time again for Finance Minister
Mr. Yashwant Sinha to unfold Budget 2001. Last year, in fact, the minister virtually
swept the IT industry off its feet with his thoughtful financial plan. It was as
though the minister had been conducting an IT Philharmonic, specially “tuned”
to the requirement of the rapidly growing software and hardware sectors.
This year too the industry is hoping for a similarly orchestrated performance. The
vision this year is for creating an environment where both the software and hardware
industries can continue their strides and percolate the benefits of IT down to the
masses. An important tool for such IT penetration is the PC, which will deserve
additional attention this year.
One of the key priorities this year is expanding the base of personal computers
across the country. Until now, PC penetration in India has been at best modest.
Compared to television, which boasts a healthy base of 75 million units across the
country, the installed base of PCs stands at a meager five million. One of the chief
reasons for this low figure is the high cost of the personal computer. The aim this
year should be to make PCs cheaper, and in line with this strategy, pressure will
have to be put on the government to bring down duties and excise rates on computers
at the earliest. Currently, duties on PCs are over 40 percent (including CVDs) and
the government will need to bring this figure down to zero at an appropriate time. The
industry too will have to bring down prices.
The Government has, in fact, signed the ITA (Information Technology Agreement)
at the WTO, under which India will have a zero import duty regime of IT products
by March, 2003. Therefore, what we should be looking at in the near future are
PCs that cost less than Rs. 10,000. This is the only way we can really beef up the
penetration levels of PCs and take IT to the masses. Therefore, Mr. Sinha should
bring down the customs and excise rates on computers, peripherals and various
components. If a basic computer is sold for less than Rs. 10,000, it will at
least create a market of five million PCs, each year.
The Times of India February 23, 2001
Hard Times, Soft Budget
Let’s Hear IT for E-Commerce
