It's bad to worse now for Gujarat resellers

Resellers in Gujarat have not been having the best of its times, for the past two years. And, if market sources are to be believed, things have only gotten worse in last two months. Resellers across the state have expressed despair at the way demand is going down. Their woes are further worsened by the utter confusion created by the state government directive on implementation of VAT from 1st April. There are also number of other issues related to sales tax, octroi and Cen VAT (levied on textile industry), which are directly or indirectly affecting the IT reselling business. 

Says Naishadh Diwanji, President, ACMA, “Scarcity of funds with the government, tight situation in the money market and a hasty decision taken by government for VAT implementation has pushed IT business in Gujarat into a greater depression.” Naishadh, who is also the CMD of Ahmedabad-based Pace Computer Consultants, fears that in the absence of a clear instruction from Government on VAT implementation, his organization may have to suffer losses.

Things apparently are no better in Surat and Baroda either. In Surat, maximum IT purchases come from the textile industry. However, for the last couple of months, the textile industry has been facing its own share of problems related to Central 

AT-related issues. This has had an adverse effect on the buying that was happening in this sector. 

“For a good part of the last month, business in the textile industry was down, as people were more absorbed in protesting, organizing bandhs and holding meetings. As a result, the recurring usage of IT products as well as new purchases took a hit,” says a worried Deepak Shethwala, President, Surat Information Technologists' Association

(SITA). 



Deepak also laments that vendors did little to help resellers tread during difficult times. “All that they (vendors) are concerned about is meeting their sales targets. How we achieve it is no more their concern,” adds he. 

A similar opinion is expressed by Paritosh Mehta, President, Baroda Information Technology Association (BITA), who feels that vendors are not taking significant steps to create demand. “Baroda is largely SOHO-driven market, but the demand has been extremely dull for quite some time now. Also users are deferring their purchase decision in the hope that VAT implementation might bring down product prices.” 

He also feels the volatile socio-political scenario in the state has taken its toll on buying sentiments. “Maybe after April, once

the exams are over, we can hope to see some demand coming in from the home segment,” adds he. 

So what are resellers doing to survive in these tough times? “We are now concentrating on administrative work within the organization and are putting all our processes in place. These lean times in a way help us to straighten up the records and paper work which we tend to neglect,” remarks Deepak. 

Another Surat-based reseller feels that focusing on consumable sales is helping him ensure his survival. “Consumable demand becomes high in the month of March because organizations need to print and store data. We are just trying to cash on this demand to stay afloat.” 

However, according to Paritosh, these bad times has once again given rise to unhealthy practices. “Traders have got into undercutting again and are selling goods even at losses to roll the cash. We are just hoping that such moves don't snowball and shake the entire market up.” 

GOLDIE