The Telegraph
Since 1st March, 1999
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Computer sales grow at a scorching 37% rate

New Delhi, July 11: First the good news: PC sales have surged 37 per cent to 2.29 million units in 2002-03 (April-March), enabling the IT hardware industry to firmly put behind itself the annus horribilis of 2001-02 when PC sales had plunged by 11 per cent.

According to the annual industry review by hardware association MAIT, the surge in PC sales has been driven by increased IT consumption by verticals and the corporate sector especially telecom, banking and financial services, manufacturing and IT-enabled services. This enabled the industry to exceed earlier projections of 20 per cent growth for 2002-03.

Major e-governance and digital divide initiatives of the central and state governments are also driving IT consumption in the country. In addition, the domestic IT industry has focused attention on producing and developing low-cost computing solutions and the trend of increased PC purchase in smaller towns and cities, witnessed last year, continued to show the same trend.

The IT hardware market is expected to grow 18 per cent in 2003-04 and PC sales would cross 2.7 million units, Vinnie Mehta, executive director of MAIT, told reporters here.

But the bad news is that the government, which has often expressed its desire to promote the IT hardware segment, has failed to walk the talk: its hardware purchases have plunged by 43 per cent year-on-year.

According to MAIT, the data reflects the sluggishness of IT spend by both the state and central governments who are authorised to earmark 3 per cent of their overall expenditure for IT spending. However, public sector companies, which also form part of the government, have increased their IT-spend by about 15 per cent.

Mehta said, “The ministry of communications and IT recently announced a draft policy for the IT manufacturing industry which attempts to address most of the challenges currently faced by the hardware industry in India.

The policy aims to set right the existing anomalies in the duty structure, incentivising manufacturing and growing the domestic market. We are hopeful that the government will work towards a speedier implementation of the same.”

MAIT said that despite the surge in PC sales, revenues had dipped by 5-7 per cent because of lower prices.

The MAIT-IMRB study on the assembled PCs show that the smaller, lesser known regional brands and unbranded systems accounted for 46 per cent of the PC sales in 2002-03. The proportion of the assembled PC had risen significantly to 63 per cent last year. However, the increased consumption by the corporate sector in the last quarter more than neutralised the impact.

Although the proportion of the assembled market remained constant compared with 2001-02, sales witnessed an increase of 43 per cent.

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