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‘Achhe din’ for PC market in India depend on government orders

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Even though, FY’ 15 is expected to close on a positive note for the Indian IT hardware industry with a likely growth of 25-30%, recent developments like the Uttar Pradesh government’s decision to shelve the free laptop scheme for students could lead the PC market in the country to fall flat or end up in negative.

Samajwadi Party had made a pre-poll announcement back in 2012 to handout free computers to at least 4.5 million students every year if voted to power. However, this year, the scheme has found no place in the state budget.

According to the recently released, MAIT Industry Performance Review (ITOPS) conducted by research firm IMRB International, desktop sales declined by 26% to 5.01 million units in 2013-14. The notebooks and net-books/laptops taken together recorded a consumption of 6.84 million units, growing 55% over the last year.

Combined under PC category, the desktops, notebooks and net-books were at 11.85 million units, registering a growth of 6%. Of the total number of notebooks and net-books, about 2.1 mn units were attributed to government education projects of Uttar Pradesh, Tamil Nadu and Rajasthan state governments.

Biswapriya Bhattacharjee International Group Business Director, BIRD, IMRB explained that of all the 6.84 million net-book/laptop, about 1.5 million units were sold as a part of the UP government’s scheme.

“And we were expecting a similar contribution from the state in 2015 as well, however, with the scheme being scrapped, the net-book/laptop sales are now estimated to 6.5 million and not 8 million as projected by the survey. That essentially is a de-growth over the past fiscal,” he said.

He said the government projects will play a critical role in deciding the fate of the PC industry in the country. “At present most of the government initiatives are short-termed or not well organised, states like Rajasthan and Tamil Nadu have undertaken some projects, but rest of the other states still lag. Going forward, the new central government’s IT inclination can change things for better.”

The apex body IT hardware industry is pinning hopes on the new government. Anwar Shirpurwala, Executive Director, MAIT said, “Considering the economic strength, India has experienced a significant growth in IT penetration, however, it is still very low compared to various emerging economies. We would want the Modi-led government to work on enabling policies for increasing IT penetration”.

MAIT has also recommended that the government should look at increasing PC penetration in Indian households by enabling the infrastructure, providing low-cost loans and discount vouchers for purchasing PCs.

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