Punjab partners lays down measures to improve IT business in the state

Raising a concern over the deteriorating health of the IT trade business in the state of Punjab, the state IT trade association-Punjab Association of Computer Traders (PACT) recently held its monthly meeting in Patiala to take a close look at the various issues which has dampened the spirit of IT channel partners. Thirteen presidents of Punjab IT associations gathered under one roof and discussed various issues which is plaguing the market, including Jammu 0% import, unjustified extended credit to tier-3 by volume partners, serious MOP issues due to which not only the sales of the IT traders are badly hit, most players are loosing confidence in the trade.

One of the main reasons behind this slowdown in IT business is the recent introduction of 0% VAT on IT products in J&K state (now extended by 1 year in the state budget of J&K). Ever since 0% VAT has been implemented, it has insulated the cross territory price war and disparity of price between the two states, which has adversely impacted the sales of IT dealers of Punjab by 20-30%.

"To tackle Jammu import issue (affecting Punjab Business and lower VAT returns), at PACT, we have formed a three members committee, who will prepare a memorandum and the same would be submitted to the ADC of all the main cities of Punjab. Puneet Dhir, the new president of Jalandhar association will head this committee," said Gurpreet Singh Jagdev, media coordinator, PACT.

Meanwhile, few PC vendors have extended their support to Punjab dealers by making price corrections to maintain the price parity in both the states. "We want more vendors to follow suit and we will be sending thanks email to such vendors who have supported us in wee hours. We will support their products in the communication to most IT dealers across Punjab dealers," added Jagdev.

Another major reform the association is planning to adopt is to introduce 'Know Your Company' (KYC) guidelines. This step will protect the association members from fly-by-night operators or defaulted vendors, distributors and dealers. In the recent past, the incidents of defaulters among the tier-3 resellers have swollen up. Many tier-3 dealers ran away with material and money of volume partners. Hence, all the 13 associations of Punjab have formed a joint action plan to prepare and distribute a comprehensive form (KYC) to all the existing and new vendors and distributors. The KYC form will provide detailed information about the company's management, escalation matrix in the case of post service. The form will also have columns of warranty terms of the products and many other vital information. Prem Saini, president, Hoshiarpur IT Association and Gupta of Global Systems, Chandigarh, will be part of the committee to take this up.

PACT will insist members to deal with only such companies who have submitted this form with the association. This way they will be able to identity black sheep in the market.

The association is in the process of implementing all the taken measures by second week of April.

On similar lines, on April 3, an initiative taken by Rajan Vohra of August Marketing, with able support from Gurpreet Singh of Premier Computers and Naveen Verma of Bama Infotech, a group of 24 whole-seller partners of Ludhiana, (which has almost 70% distribution share in Punjab market) and some key partners from Sangrur, Chandigarh and Bhatinda formed Punjab IT Club and conducted its first meeting, which was also attended by a few national distributors in Ludhiana. The objective of this meeting was to raise issues, pertaining to the volume partners of Ludhiana. All the 24 dealers passed a resolutions and took an oath to implement these resolutions which would help each and every member of the trade.

The group took these resolutions to bring transparency and accountability among the tier-3 partners: Some of the resolutions include:

*From now on, volume distributors will start the practice of giving cheque (with or without sign - it could be signed later) against delivery of material.

*Advance cheque to be collected from tier-3 partners.

*The group has asked PACT to hire a third party agency, who will monitor tier-3 partners credit rating and credibility. This agency will work across Punjab.

*The group also suggested partners to collect the bank statement of the past 6 months from the new partners while initiating the transaction with them

*Tier-3 partners with below Rs 2 lakh will not be billed by the NDs (exempted product list will be discussed in Vendor/ND exclusive meeting with these partners which is planned for next week.)

*NOC to be taken from the outgoing distributor.

All the 24 distributors have given their written consent to implement these resolutions at the earliest. Moreover, this group will be meeting every first Wednesday of the month to discuss all concerning issues.