The Hindu Business Line : Welcome growth in hardware: Survey

LAUDING India's IT and BPO sectors for having built valuable brand equity globally, the Economic Survey today took note of the "welcome acceleration" in the hardware sector.

"The share of hardware and non-software services in the IT sector has declined consistently every year in the recent past," the Survey said. "The share of software services in electronics and IT sector has gone up from 38.7 per cent in 1998-99 to 61.8 per cent in 2003-04. However, there has been some welcome acceleration in the hardware sector with a sharp deceleration in the rate of decline of hardware's share in the electronics and IT industry."

After declining from 61.4 per cent in 1998-99 to 40.9 per cent in 2001-02, the share of hardware in the IT industry declined only marginally to 38.2 per cent in two subsequent years, it said.

The survey added that output of computers in value terms had increased by 36 per cent, 19.7 per cent and 57.6 per cent in 2000-01, 2002-03 and 2003-04 respectively.

In ITES, India had emerged as the most preferred destination for BPO, a key driver for growth for the software industry and the services sector.

The ITES-BPO industry is estimated to have grown by about 54 per cent, with export earnings of $3.6 billion during 2003-04.

The output of the Indian electronics and IT industry is estimated to have grown 18.2 per cent to Rs 1,14,650 crore in 2003-04.

On the demand side of software sector, it said that export markets continued to dominate the domestic segment.

The size of domestic market in software fell only to 29.1 per cent and 27.7 per cent in 2002-03 and 2003-04 respectively, it added.

STPI reported software exports of Rs 31,578 crore during April-December 2004-05, compared to Rs 22,678 crore during the same period the previous year.

The survey also sought to allay apprehensions of the domestic manufacturers in the backdrop of the upcoming zero duty regime from April 1, 2005 under WTO's IT Agreement (ITA-1).

"Tariffs on raw materials, parts other inputs and capital goods have been rationalised to make domestic manufacturing viable and competitive," it said.

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