Reduce IT hardware cost to increase IT penetration: MAIT

by CXOtoday News Desk    Oct 31, 2013

IT hardware

The Indian IT hardware industry can make a substantial impact on IT penetration in the country by bringing down the hardware cost by 43%, says industry association MAIT. Government can  enable this cost reduction by providing subsidies reducing the total cost of ownership (TCO) of a PC and broadband solution (currently estimated to be Rs 15,650 per annum), providing Income tax exemption to individuals against PC purchase, and promoting purchase of PCs amongst specific segments like students and less than Rs 5 lakh income households, among other steps, suggests a MAIT-KPMG Report titled –“Indian Market Place- IT the unrealized potential”, unveiled by Sam Pitroda, Adviser to Prime Minister, Public Information Infrastructure & Innovations, Government of India.

Amar Babu,President, MAIT, says, “There is no denying that India has a huge potential for the growth of IT hardware industry, we need the right approach to enhance IT penetration and significantly contribute to the economic growth. This report has identified some of the bottlenecks which are hampering the PC penetration in the country and has proposed the most viable recommendations to overcome them”

The KPMG report estimates that in FY 2014-18, there could be an increase in sales of desktop and notebook from 6 percent to 18 percent CAGR contributing additional GDP of Rs 66,300 crore, taxes of Rs 25,000 crore and generate new employment for 1,11,600 people.

According to the findings of the report, the current PC penetration in rural India is limited to about 9 million households whereas about 14 million can afford computers, as they fall above the estimated affordability level of Rs 5 lakh annual family income. Hence, 36% households in rural areas that can afford a PC still do not own one. Low rural literacy, poor infrastructure and lack of local language product customization are some of the key impediments to rural PC penetration.

Anwar Shirpurwala,Executive Director, MAIT,says, “Increasing the penetration of PCs would not only contribute to the economic drivers but it would carve a path towards a developed and computer- educated society. A better IT infrastructure would lead to life augmentation that would help consumers as well as the Government. Similar to the adoption in the private sector that has taken the lead with banking, online ticketing, services, online shopping, all of which ‘make life easier. On the whole, this would enhance India’s face in the race with the other developed nations of the world.”


Tags: MAIT, KPMG, PCs, Hardware