Chidambaram delivers a PC friendly budget

Keeping in view the WTO agreement of a zero duty regime from April 2005 in
the hardware sector, the Finance Minister, P Chidambaram today announced 100
percent excise duty exemption on computers. The minister also announced that
Braille computers would be fully exempted from customs duties. While this may
not have come as a major surprise to many, the Indian hardware sector and PC
players are more than happy with the decision.

According to Ajai Chowdhry, CEO and Chairman, HCL Infosystems, the industry
is happy with the Finance Minister's decision to reduce excise duty from eight
to zero percent on PCs, including parts used for PC manufacturing. "This
step assumes even more significance as it has come ahead of the WTO zero duty
regime. This is a very positive step and will definitely help the organized
sector in making more investments in manufacturing," he said.

Welcoming the move, Vinnie Mehta, Executive Director, MAIT, said that it
would help increase the PC penetration to a large extent. However, he also
mentioned that there is not much clarity on the duty being levied at the
component level. "We are waiting for the notification, because if there is
duty at the component level, then it will not help the overall cause of keeping
the price point of a PC in control," he added.

"We wholeheartedly welcome this move by the government. This is now
going to herald a new era of PC penetration in the country. PC will be more
affordable now not only in B and C class cities but even in smaller
cities," quipped R Manikandan, Deputy GM (Sales and Marketing - IT
products), LG Electronics.

The government's decision to reduce the excise duty comes at a time when
the industry is moving full steam to increase the penetration of PCs in the home
and the SME sector.

Echoing similar thoughts, Phiroz Vandrewala, Executive VP, TCS, said that
overall it's a very positive IT budget. "It's a good attempt to reach
out to the larger section of the society. The IT sector had no major
expectations from this budget. We just wanted the Finance Minister to maintain
the status quo. Some operational issues still remain and we have been assured
that they would be looked into very soon. The abolition of excise duty on PCs
will surely give a fillip to the domestic industry and the IT industry will grow
at 30—35 percent next year," he added.

CyberMedia News

New Delhi