Finance minister announced more sops for the HW sector

Finance Minister, Yashwant Sinha, has assured the hardware sector of more tax

sops and simplification of EXIM procedures to promote the sector amid economic

slowdown.

This was stated by the finance minister after a meeting with the IT Minister,

Pramod Mahajan.

Some of the other decisions taken during the meeting also included the

government's offer of 24-hour facility in customs procedure for hardware

importers to reduce time lag. The facility would be available in three sea ports

— Chennai, Kolkata and Mumbai and four airports - Bangalore, Delhi, Goa, and

Hyderabad. The ports would work in two shifts for faster clearance of goods.

Sinha added that the government would soon set up a mechanism to monitor the

three percent expenditure by individual ministeries in IT initiatives. Regarding

the issue relating to the IT agreement (ITA) under the WTO obligations, he said

that it would be taken up by the two ministeries.

The meeting was also attended by Sukunar Sankar, Chairman, Central Board of

excise and custom, MAIT representatives, Azim Premzi, Chairman, Wipro and Phiroz

Vandrevala, Chairman, Nasscom.

The above meeting had taken place against the backdrop of the recent meeting

of National Advisory Committee in IT. The meeting was attended by industry

bigwigs, Pramod Mahajan as well as representatives from MAIT, FICCI and CII.

Azim Premji, while giving his presentation to the committee on 'Turbo

charging the Indian economy' had suggested the reverting to the original ITA-WTO

deadline of 2005.

India had signed an agreement in Singapore ministerial of the WTO in 1996,

where under the ITA-I, all developing countries have to bring 217 tariff line

under the zero duty regime by 2005. In 1998 the finance ministry had preponed

the deadline to 2003 with a view to prepare India for globalization.

The software industry leaders present at the meeting reacted sharply to

Premji's suggestion as they thought that the delay of the deadline for ITA

implementation would bring a bad name to the country and would also affect the

software export industry negatively.

The reason for Premji's suggestion is that hardware competence is essential

for continued competitiveness in software and IT-enabled services. The target

for software market for 2008 is $ 87 billion whereas the total hardware

requirement would be $ 160 billion. If the requirement is made through hardware

imports, the import bill for that would come to a staggering $120 billion

between 2001-2008. So he stressed the point that a robust domestic hardware

manufacture is needed to cater to this need.