Government Must Catalyze Hardware Manufacturing

The ‘India Hardware Summit 2003’ organized by Confederation of Indian
Industry has taken place at the right juncture. H7ardware industry stalwarts gathered at the Summit were unanimous in their
opinion, and we agree with them, that unless the Central Government plays the
catalytic role, the hardware manufacturing would make very little headway in the
country.

The government should play the catalytic role in three ways: help expand
local market by increasing its spending on IT; bring down duties drastically on
components; and build robust infrastructure to accelerates hardware
manufacturing.

Unless the Central Government plays an active role in helping PC penetration
in the country, one cannot expect hardware manufacturing to take off because
economies of scale does not permit it. The Government must make provisions in
the coming budget to computerize all its operations for a twin advantage–to
increase efficiency and bring about transparency.

The Government must find ways and means to reduce taxes on the PC and bring
its prices down to the level of a TV to stimulate demand in the local market.

The next job the Government must handle is to bring down duties drastically
on components. What is now required is a full-fledged surgery to get rid of the
duties to make manufacturing a worthwhile venture financially.

Building a robust infrastructure is the third job that the Central Government
should continue on a war-footing for which it gave a big push in its budget for
2003-04.

When one talks of infrastructure, one cannot but point out the large-scale
delays still obsevered on the export-import front. The Government did make some
noice while presenting the export-import policy for 2003-04 that measures will
be taken to overcome delays and transparency will be maintained. But very little
has been achieved in this area.

When MNCs want to invest on hardware manufacturing in any country, the first
thing they look for is the ease of operations and transparency in the area of
export-import. Unless these are achieved–strong political will is required to
achieve this because bureaucrats will continue to go with their old ways–MNCs
will bypass India for other countries.

Once the Government begins to play the catalytic role proactively, what the
industry leaders must realize is that the investments towards manufacturing have
to come from them in a greater measure to make the country’s hardware revenues
potential of $ 62 billion to come true by 2010.

Sylvester Lobo