FITAG withdraws from PC scheme

AHMEDABAD, INDIA: Flood IT: KG to PG scheme, an ambitious project initiated by the Gujarat Urban Co-operative Banks Federation (GUCBF) has failed to impress channel partners in Gujarat.

Federation of IT Association Gujarat (FITAG) is no longer keen on supporting the scheme even as GUCBF has issued orders to extend the scheme till end of July.

The Flood IT project, which was started in Feb, was devised with an aim to enhance PC penetration across Gujarat.This was particularly aimed at rural areas, by extending zero percent finance on PCs to students from kindergarten to post graduate level. According to FITAG’s expectation the scheme was supposed to deliver over one lakh units of laptops and desktops in three months time. However, according to sources at FITAG the scheme that was scheduled to come to an end by June 30, 2009, has been able to deliver only around 10,000 units of laptops and has now been extended till July 31.

Citing the reasons behind FITAG’s decision to discontinue support to the scheme, Kaushik Pandaya, President, FITAG mentioned, “Flood IT scheme was not designed taking channel into consideration. It is not at all a channel-friendly scheme and there have been multiple flaws in it. Hence we have resolved to discontinue our support to the scheme and will instead have a similar scheme in place. The new scheme will be devised in a way that it offers maximum advantage to the channel. We have circulated a mail amongst all the 23 associations that are a part of FITAG and will inform them of our decision.”

Throwing light on the flaws within the scheme, Pandaya mentioned that in the first place the scheme was limited to resellers of HP, HCL and Acer, and did not take other brands into consideration. Besides, even the end-users who were the ultimate buyers of the goods were not comfortable with the lengthy process and formalities involved in the scheme. “Every time a buyer wanted to purchase a PC he had to first bring in a guarantor to avail the equipment which in itself is a tedious process. We are now looking to have a similar scheme and are in talks with several other vendors including Lenovo, Dell, eSys. The new scheme will ensure better margins for channel.”

When contacted Jyotindar Mehta, Chairman, GUCBF clarified, “We have not received any notification from FITAG regarding their withdrawal from the project. We have now extended the scheme in view of public demand and it will continue till end of July. If FITAG wants to have a similar scheme of their own, then we will encourage them since the main aim is to spread education in Gujarat through PC penetration.”

Mehta further elaborated that the above scheme was not funded by government and it was designed to augment business for banks. On the allegations that the scheme has fallen short of its target and it had various flaws Mehta clarified, “The whole idea behind the scheme was to boost education and encourage PC penetration in Gujarat and we had never set aside a target. There are around 300 co-operative banks involved in the Flood IT project and each one has their own set of policies for disseminating finance. While some banks look for security before extending finance others don’t.”

When contacted, HP refused to comment on the issue, HCL could not be contacted despite repeated calls. Acer however, confirmed that it was aware of FITAG’s decision and was now looking at ways to resolve the deadlock.

Jai Shankar, Director Sales and Marketing, Acer clarified, “We are planning to meet both FITAG and GUCBF and look at ways to resolve the matter. The scheme has not taken off as expected but given the fact that it has now been extended and an MoU is already in place we will look at amicable solutions to the issue.”

Apurva Dave, CEO of Ahmedabad-based Innova Systems and the sub-distributor appointed by HP for the project, stated, “FITAG has communicated their decision to withdraw from Flood IT Project to us and we will look at ways to resolve the issue amicably. More than 100 partners in Gujarat have benefited from the project since we have aggressive price point in place. The project has been extended for another month as most of the schools and colleges have declared their results by now and the education segment will now start buying PCs.”