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Harsh Chitale: Encourage domestic IT manufacturers and drive innovation

Harsh Chitale
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The upcoming Budget can be a vehicle to bring in significant changes in key industries including in the IT sector that will enable the economy to grow in a robust manner.

I would expect changes to be effected at two levels – one at the policy level impacting various key sectors and second, on an implementation level of these policies.

Some of the key sectors that needs immediate attention and are crucial for the health of the economy are power, infrastructure and telecom. Policy initiatives have been good. However, the air of uncertainty needs to be removed and implementations need to happen quickly so that investments can actualise in these sectors.

Government-owned enterprises such as MTNL and BSNL are of strategic importance and their success is vital for the industry to do well. For instance, BSNL today operates a national Internet backbone that also takes broadband connectivity into rural India. BSNL also implements networks required for our country’s defence but today the entity is incurring huge losses, which is a matter of national significance.

So in this Budget, the Government needs to come up with a revival plan for these enterprises. This could be in the form of fund infusion, change of policy or even setting up some tribunal or bodies such as the National Investment Board.

Specific to IT industry, in the domestic electronic manufacturing sector it is imperative to eradicate anomalies such as inverted duty. Today, it is cheaper to import a readymade product than to make a product here in India. So there is an urgent need for policy interventions in this sector to encourage domestic manufacturers and drive innovation.

To give a perspective on the urgency, as per industry reports and government-owned reports, we are looking at a $400-billion import of electronic goods into the country in 2020 which would exceed our oil import bill.

Aadhaar has the potential to position India as an innovation leader, especially to bring in a disruptive change in financial inclusion initiatives. In this context, the direct cash transfer under Aadhaar is a great initiative and a time-bound aggressive implementation will create a huge success story. This would not only provide a platform for rural India to grow but will also be a great achievement and development for our IT sector as well.

(The author is CEO & Whole-Time Director, HCL Infosystems)

(This article was published on February 20, 2013)
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