The Hindu Business Line : Hardware sector bets on computerisation, e-gov initiatives

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Bangalore Feb. 28 While IT hardware firms in the country feel distanced by the Budget, they are happy that stability in duty structures are maintained.

Consumer electronics major Samsung is peeved that "this year's Budget has virtually left the demands of the consumer electronics sector untouched". The only relief that has come to this sector is in the form of the reduction in the peak rate of customs duty from 12.5 per cent to 10 per cent, which gives some marginal relief for products that are imported as CBUs or the components that are imported, said Mr R. Zutshi, Deputy Managing Director, Samsung India.

In spite of their disappointment, many vendors kept their chin up and pinned hopes on the secondary effects of the e-governance and computerisation thrust. The Finance Minister also announced an increase in the funds into e-governance to Rs 719 crore in 2007-08. The Central Government also increased support for state-level e-governance action plans from Rs 300 crore in 2006-07 to Rs 500 crore in 2007-08.

"We expect the demand for IT products to rise with the new initiatives announced," said Mr S. Rajendran, GM - Sales and Marketing, Consumer Product Group, Acer India. "The Government has done a good job of portraying a stable policy regime. People expected taxes to go down, which would have meant overall reductions in price of end products. The Government, by not changing, has perhaps sent a message that it is keeping it at a stable level," he added.

"The reduction in duty on plastics from 12.5 per cent to 7.5 per cent will also offer some small relief. On the overall impact of this Budget on prices of consumer electronics products, I see no relief coming to consumers," said Mr Zutshi. PC vendor HCL agreed, "Our expectations have not been met. From the end-consumer perspective, there is nothing to look forward to in the Budget."

MR JANGOO DALAL

Mr Jangoo Dalal, President- India & SAARC, Cisco, felt it was heartening to see that the Government was clearly committed to e-governance and that computerisation programmes for the public distribution system and FCI would enhance efficiency and benefit the common man.

"We are greatly excited about the emphasis that is being laid on e-governance in the new budget. At NXP, we have deployed this technology in various countries through RFID technology and through e-passports. We hope to work with the Indian Government on similar initiatives," said Mr Rajeev Mehtani, Vice-President and Managing Director, NXP Semiconductors India.

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