Narendra Modi has sworn as 15th Prime Minster of India on 26th May at Rashtrapati Bhawan where more than 4000 guests attended this historical event. The event was also graced by top leaders from all seven SAARC nations including Prime Minister of Pakistan.
No Doubt about the fact that we all are expecting good days ahead under the leadership of our new PM. MAIT, the apex body actively representing IT Hardware sector congratulates Mr. Narendra Modi for steering the BJP to victory.
Although the new government will be faced with new demands and expectations, it has to look for resources and expertise to revive economic growth as also renew investments, particularly in the technology space.
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.
Commenting on the victory of BJP, Mr. Amar Babu, President, MAIT said, “Although Mr. Narendra Modi has actively spoken on manufacturing, we suggest his govt. 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 also remarked, “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”, added Debjani.Anwar Shirpurwala, Executive Director, MAIT commented, “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”.
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 recommends the key action items for the BJP Government to take ICT on a global footprint:
- Ecosystem for Manufacturing – With electronic imports standing at USD 16 billion, the BJP should put enabling policies in place for sprucing up hardware manufacturing to facilitate investments in the country.
- Inverted Duty Structure – 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.
- Unfriendly Operational policies – Implementation woes in Compulsory Registration order, delays in granting of EPR authorizations by State Pollution Boards, no fixed process for registrations and unclear deadlines badly impact the industry. The IT industry has always been a trendsetter in terms of quality and safety. Government should jointly work with the industry on self-regulation.
- Exchange Rate Variations – The IT Hardware industry finds it difficult to compete with exchange rate variations. The Government should look at amending the adoption of Exchange Rate Variation clause for all IT hardware product purchase contracts, regardless of delivery period under the General Finance Rules (GFR), 2005
- Subsidies for PC Penetration – The BJP should look at increasing PC penetration in Indian households by enabling infrastructure, providing low-cost loans and discount vouchers for purchasing PCs.
