MAIT Urges Modi Govt To Stimulate IT Growth

by CXOtoday News Desk    May 27, 2014

it growth

Congratulating Narendra Modi on taking oath as Prime Minister, the IT hardware industry body today urged the government to stimulate growth in the ICT segment. “The BJP should look at increasing PC penetration in Indian households by enabling infrastructure, providing low-cost loans and discount vouchers for purchasing PCs,” it said.

While India has experienced significant growth in PC sales in the past few years, it still has IT penetration below 10%. We expect the BJP to stimulate growth in the ICT segment, which would engage 4, 23,500 people, contribute 2, 91,700 Crore to the GDP and 1, 10,600 Crore in taxes during the next five years, MAIT said in a statement.

The IT hardware industry finds it difficult to compete with exchange-rate variations, Mait said, adding that the government should consider amending adoption of exchange rate variation clause for all IT hardware product purchase contracts, regardless of delivery period under the General Finance Rules (GFR) 2005.

Read: The Man Behind Narendra Modi’s Digital Success

“Implementation woes in Compulsory Registration order, delays in granting of EPR PR (extended producer responsibility) authorisations by state pollution boards, no fixed process for registrations and unclear deadlines badly impact the industry,” MAIT said.  

Amar Babu, President, MAIT said, “Although Mr. Narendra Modi has actively spoken on manufacturing, we suggest his government put in place a manufacturing ecosystem immediately by ushering in policy reforms, regulatory frameworks and removing inverted duty structure to facilitate investments in the country”.  

He added, “India is a difficult place to start any business, especially when it comes to enforcing contracts and obtaining building permits. India should restore confidence by addressing these issues and checking India’s miserable rank of 134 in World Bank’s ‘ease of doing business.  The Government should consider lowering interest rates on corporate borrowing and a steady transformation of India’s complex tax structure.”  

Debjani Ghosh, Vice President, MAIT remarked that “Since Mr. Modi has actively advocated technology penetration and digital literacy, we wish the government build an intelligent and confident India by fostering technology adoption, sprucing up infrastructure, ensuring last mile connectivity, reduce VAT and provide access to easy bank loans in the context of ICT.”  

“Technology should not be treated in a silo, but should be made an integral part of all national agendas, be it education, healthcare, infrastructure, financial inclusion or even governance because only such measures will truly bolster national growth,” Ghosh added.  

Anwar Shirpurwala, Executive Director, MAIT said, “As a first measure, BJP Government should provide a climate that can enable investment promotion and build on policy measures that would accelerate the growth of domestic manufacturing. Positive sentiments will also build if hurdles are removed in implementation of many existing policies.”  

Also read: Nasscom Urges Modi Govt To Usher Positive ICT Changes

He also said, “Considering the economic strength, India has experienced a significant growth in IT penetration, however, it is still very low compared to various emerging economies. We would want the Modi-led government to work on enabling policies for increasing IT penetration.”

MAIT also stated with electronic imports standing at $16 billion, the BJP should put enabling policies in place for sprucing up hardware manufacturing to facilitate investments in the country. Experts said inverted duty structure makes domestically manufactured goods uncompetitive. The new government should look at exemption of SAD on all components used by the IT manufacturer.