We expect the upcoming Union Budget for 2013-14 to focus on reducing fiscal deficit and set the path for sustained economic stability.

This would need bold decisions on ushering in key reforms and policies that were missed in the last Budget. Infrastructure investment and rationalisation of subsidies would be key elements.

At the individual level, although the Government did some restructuring of the personal income tax slabs, the need for reinstatement of standard deduction and enhancing the rebate levels, is paramount: the continuing inflationary trend has caused a more than normal erosion in retention of earnings.

The Government’s decision to approve 51 per cent FDI in multi-brand retail sector and 100 per cent FDI in single brand is undoubtedly a decisive step that will boost the economy and create a multitude of jobs across the entire supply chain in the coming years.

As a progressive measure, the introduction of the long-pending introduction of Goods and Services Tax and Direct Taxes Code reforms should be implemented to spur economic growth and attract more domestic and overseas investments in key sectors. The economic slowdown and the consequent disappointing growth in GDP has had a severe effect on the demand for IT products; more specifically PCs.

Given the multifarious potency of higher PC adoption in the country - productivity, employability, transparency - to name just a few, we expect the Government to confront the slow-down at two levels.

Firstly, the numerous policy inconsistencies and speed-breakers in the form of archaic rules, need to be dispensed with: these include things like abolishing the inverted duty structure, removal of Special Additional Duty of 4 per cent; enabling adoption of the Exchange Rate Variation clause in Government/ PSU procurement of IT products, and doing away with the procedurally cumbersome MRP abatement based duty on PCs. At a larger level, the Government needs to encourage an accelerated usage of PCs -- this can come about through higher depreciation rates; set-off of the PC cost against the income-tax payable in a block of two years (much like LTA); and easy loans for purchase of PCs.

All this will result in improved PC penetration (which is woefully low even compared to the other peers in the BRIC group) and pave the way for attracting FDI in local manufacture of key components such as processors, memory, storage, optical drives, displays and motherboards and create a healthy ecosystem for a robust domestic manufacturing base for IT.

(The author is Chief Marketing Officer, Acer India.)

As told to S. Ronendra Singh

(This article was published on February 20, 2013)
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