The Hindu Business Line : Promoting PC penetration

THE TIMING OF the recommendations of the high-power Working Committee of the Ministry of Communication and Information Technology to improve penetration of personal computers in Indian homes could not have been better. For instance, a key recommendation that organisations such as the Indian Institutes of Technology, the Indian Institute of Science or the Centre for Development of Advanced Computing (C-DAC) design an ` India PC' at a price of Rs 9,000 is not new in itself. But the circumstances of the latest suggestion are fundamentally different.

First of all, the hardware industry is now better geared for mass manufacture with such policy bottlenecks as an inverted duty structure between components and finished computers and the regressive VAT-related levies having been eliminated. A favourable fiscal concession regime has also been put in place. The mobile telephone revolution has raised the aspiration levels of consumers and that has provided hope for manufacturers of personal computers. Several multinationals are already in the fray to exploit the emerging market opportunity with products such as Intel's low-price processors, Microsoft's low-cost starter editions for XP or AMD's Personal Internet Communicator for basic applications. Pursuing the mid-term option of a low-cost computer, especially in a government-private sector partnership may well be worth the effort this time around.

In the short term, the Committee has recommended allowing home computer purchase as a deduction under the Income-Tax Act, multiple financing options from public sector banks at special rates, or making computer financing a part of priority sector lending (like agriculture) to improve PC penetration. Going by Korea's experience in enhancing Internet and broadband penetration through fiscal concessions, some of these suggestions may be worth considering. But since PC penetration is also linked to Internet usage, the user experience in a home dial-up situation has been so poor that there has been a marked reluctance to invest in PCs, even in cities. Unless the government takes the initiative in improving bandwidth availability to all Internet service providers, instead of just the public sector units, the Internet user experience will continue to stifle the growth of this sector.

This push should be supplemented by initiatives to make available educational material for secondary and higher-secondary students that is not only relevant but also contains features of interactivity so as to unleash a huge market for home PCs. Parents who currently regard computers as an expensive toy for the children's amusement would view it as an investment in career-building. India ranks very poorly on digital access to information and communication technology compared to some of the countries in East Asia. It is no coincidence that, in terms of per capita incomes too, the story is not very different.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Promoting PC penetration

Why the Maharaja's choice may save his life

Reforming UN

Benign towards banking

Confusion now hath made his masterpiece

Principle of strict construction

Sadly, economics is typically explained so badly