New Delhi; November 5, 2013: Woefully small penetration notwithstanding, Personal computers can be a significant socio economic driver feels MAIT, the Manufacturers' Association of Information Technology. But hardware costs need to come down by at least 43% -- with government subsidies, reducing the total cost of ownership (TCO) of a PC and broadband solution (currently estimated to be Rs 15,650 per annum).
The MAIT- KPMG Report titled –“Indian Market Place- IT the unrealized potential”, unveiled by Dr. Sam Pitroda, Adviser to Prime Minister, Public Information Infrastructure & Innovations, on November 6, estimates that between 2014-18, there could be an increase in sales of desktop and notebook from 6 percent to 18 percent CAGR contributing additional GDP of Rs 663 billion ( 66,300 crore), taxes of Rs 250 billion (Rs 25,000 crore) and generate new employment for 1,11,600 people.
Says Amar Babu, President, MAIT:“There is no denying that India has a huge potential for the growth of IT hardware industry, we need the right approach to enhance IT penetration and significantly contribute to the economic growth. This report has identified some of the bottlenecks which are hampering the PC penetration in the country and has proposed the most viable recommendations to overcome them”
Extracts from the MAIT-KPMG report:
Amongst the 78 million urban households, only ~15 million own a PC whereas, in the total base of 168 million rural households only 9 million households currently have a PC.
The addressable base threshold for PCs is estimated at Rs 300,000 annual household income based on the distribution of other household assets (e.g. two wheelers, color television, etc.) and socio-economic classification of households; which results in an addressable base of 32 percent of urban (~25million) and 15 percent of rural (~25 million) households3.High total cost of ownership of PC & broadband solution, of which PC cost constitutes 46 percent2, seems to be a significant barrier to adoption.
In case of Micro, Small and Medium Enterprises (MSME),majority of the employees are deployed in the operations,thus limiting PC utility to very few. Various surveys highlight high cost of IT hardware as the other key barrier to IT adoption in MSMEs.
Government procurement of IT hardware for the Central and State Government employees would largely be replacement driven demand. E-governance initiatives, modernization programs, and schemes such as free or subsidised distribution of IT hardware would drive new demand.
A number of initiatives have been launched by various Central / State ministries like National e-Governance Plan,ICT@Schools, Rajiv Gandhi Computer literacy programme (Assam), IT@School (Kerala), digitization of land records. However, implementation delays of these projects and low PC usage even after training indicate scope for improvement.