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Study calls for zero tax policy to improve PC penetration

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CIOL Bureau
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NEW DELHI, INDIA: The Indian PC industry, which is growing at around 20 percent annually, can get an publive-imageadditional boost of over 17 percent, if a zero tax policy (ZTP) regime is implemented for the sector, according to a study.

A study done by Indian Institute of Management Bangalore (IIM-B) titled, Report on the impact of zero tax policy on the personal computer industry in India, has pointed out that such a move could have a beneficial multiplier effect. The report authored by Prof G Ramesh, Prof Shyamal Roy and Prof Gopal Naik has said the India's position in terms of PC penetration, purchasing power and the presence of global manufacturing giants is quite poor, when compared to other countries like China, Brazil and Russia.

The implementation of ZTP will see an immediate impact in terms of prices declining by at least 12.5 percent. The current penetration of PCs in the country stands at 23 per 1,000 people and this compares very poorly with other countries. In China it is 79 per 1,000 and 139 in Brazil and 153 in Russia. The report states that at the current growth rate, the PC penetration will touch 62 for every 1,000 people by 2011.

The IIMB study said there are typically three waves, which is associated with the PC hardware industry. In the first wave, it is mother unit manufacturers who set up their operations, followed by the second wave of setting up of the ancillary units. The third wave brings the synergies between the first two creating global scale of operations.

Source: Agencies