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Hardware hardly touched

BS Bureau

The prices of computer hardware will not be affected by the changes in import duties announced in Wednesday's Budget. Finance Minister Yashwant Sinha announced a cut in import duties on information technology products from around 25 per cent to 15 per cent.

"The prices of computers are not likely to fall due to the cut announced in the Budget, as most of the components under the current norms are either below 15 per cent or at 15 per cent," said Vinne Mehta, director Mait, the association of Indian hardware companies. "The products which attract more than 25 per cent import duty do not have any major impact on PC prices," he added.

According to Balu Doraisamy, MD Compaq India: "The Budget has been a let down for the hardware industry. The drop in surcharge results in a reduction of only 1.8 per cent on finished goods and the impact on raw materials will be a negligible 0.5 per cent reduction."

Expressing similar sentiments, Manish Aggarwal, director, marketing, Vintron, said there will be no effect on the PC pricing as there are no changes in the tariffs structure of either customs or excise duties. There has been no change in the structure of the customs duty except the removal of surcharge which is not going to have any noticeable impact," Aggarwal said.

Hardware industry is also of the view that the Budget failed to check the growth of the unorganised sector. "The overall reaction to the Budget is of disappointment as there are neither any measure to control the unorganised sector nor anything to boost the organised sector,"Aggarwal said.

"One expected more changes in import duty structure keeping in view the WTO obligations. But going by the finance minister's speech, the impact on this area is very marginal," said Abraham Thomas, MD and CEO, IBM India Ltd.

Abraham, also welcomed the government's move to allow Indian employees subscribing to ESOP schemes in foreign-owned companies to make overseas investments upto $20,000 annually instead of in a block of five years and said that this move would lead to the IT industry attracting more quality manpower.

The IT industry also expects that the increased thrust on the government's IT spending will have a positive impact for the IT sector.

According to Mohandas Pai, director, finance and administration, Infosys Technologies, increased spending on IT by government departments will bring efficiencies and expand the market for IT.

Finance minister also announced an increased thrust on the technical education. According to the Indian IT industry this will go a long way in meeting the global requirement of the trained technical personals. "I am pleased by the clear commitment at the highest level of the government towards technology education," said Manoj Chugh, president India and Saarc, Cisco.

Source: Business Standard

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