Downtime for IT resellers in East

After the fuel price hike, appreciation of the dollar rates and the double
tax on software, dealers in Eastern India are now facing renewed problems due to
the fury unleashed by the early arrival of monsoon. All factors combined
together have put a bleak forecast on the IT sales in the region.

The worst hit because of the rains has been Jamshedpur, which has been
flooded.

Though the rains have let up recently, the city is still waterlogged with
many enterprises remaining closed or disabled throughout the day. “The basement
of my establishment is completely waterlogged and the stocks have all been
wasted because of the downpour,” said RK Agarwal, CEO, BL Infotech, Jamshedpur.

Mobile operator services including PSTN communication are out of gear. Parts
of the city have been without power for three days as the electricity board has
cut off the supply for fear of short circuits and electrocution. The only relief
that is available is the power supply by TISCO in the nearby factory area and
the responsible management by TISCO Town Services.

Worried over the situation in Jamshedpur, Abhay Upadhyay, CEO, Computer World
commented, “My enterprise has remained closed for the past three days. With all
bank links failing in the city, it is impossible to carry out online financial
transactions and even cash flow has not been regular. We are not even in a
position to put an estimate to whatever we have lost.“

The situation is other parts of eastern India is marginally better. While
Kolkata and West Bengal seem to be getting along despite the rains-the
indefinite bandh in Darjeeling has hit the sales in Northeast.

Speaking about the situation in Northeast, Punit Chopra, CEO, PC Computers,
Agartala, said, “This is the time when monsoon usually arrives in the Northeast.
It is natural here to incur lesser sales at this time. But the reason why sales
have hit such a low is mostly because of the cost of logistics, which have gone
up. Plus during this cargo charges anyway go up.”

Large parts of Orissa including Balasore, Mayurbhanj, Bhadrak and Jajpur have
been flooded and a 40-feet stretch of National Highway No 60 has been swept off
cutting off the district from the heartland and halting all vehicle movement.

When asked about the status of IT sales in Bhubaneshwar Subash Das, CEO, Info
World said, “It is because we have hoarded up peripherals in the recent past,
that we have able to make up for the lag this time. Usually, this time of the
year, sales go down. However, this time, coupled with the rise in fuel charges,
the overall price of peripherals has gone up and the trend will continue till
the month end.”

While some enterprises like Das's have stocked up, the partners in interior
places of Orissa have had to bear the brunt as commutation has being brought to
a halt with the mud-roads becoming inaccessible at this point of time and
deliveries not being made in due time. While freight charges are lesser here
when compared to the Northeast, it is the rise in hardware prices that is having
the maximum impact.

The distributors on their part are also feeling the pinch in the region.
While most distributors have a proper back-up system and logistical support
across the nation, and the supply chain has not been affected much but sources
in Ingram Micro revealed that the primary concern affecting the IT market is the
revised rates of software and hardware prices. The appreciation of US dollar has
pulled up the hardware prices, and the recent changes in the Government's
financial policies have increased the software prices. Since June 1, 2008
additional service tax along with VAT has been incorporated in the dealer
software price, further pulling up the price and bringing the sales to an all
time low.