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'Treat Mobile Phones As Education Tools'
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According to various industry sources, spending in India's technology and electronics market is expected to reach about $400 billion by 2020, up from $45 billion in 2009. This clearly indicates that despite the economic slowdown and adverse situations prevailing in India, the country is seeing a robust demand for electronic gadgets/ products from every part of the country.
However, there are some rigid policies prevailing in the system such as variant VAT charges, octroi charge, entry tax, and inverted duties etc which have become deterrent in establishing the country as a manufacturing hub. Hence, for companies especially domestic to be developing 100 per cent import substitute gadgets, both the State and Central government in alignment will have to introduce flexible policies such as stable taxation, liberalised labour laws, manpower training to name a few. The policies in isolation will not bring in multiple changes but will surely accelerate the process of building an ecosystem i.e. constant electricity supply, adequate land, trained manpower. Manufacturing clusters will not give desired results without enabling eco system of zero taxes and duties coupled with investment facilitation. Proper eco systyem will push the companies to establish manufacturing set-ups in the country which not only will reap benefits to them but will boost the economy as well.
This year, the production volume of mobiles in India is over 18 crore pieces which is commendable but it is important to note that only 40 per cent of the total goes in domestic market and the remaining 60 per cent goes to the export market. Another concern is that the manufacture of parts, components and accessories has to go up substantially, so that we can leverage this large domestic and global market. There are no manufactures of parts and components or accessories in India except batteries and chargers. Direct tax benefits should be given to manufacturers. Raw material and consumables for manufacturing of sub-parts and parts of mobile phones shall be exempted from Customs and Excise duty. Removal of bottle necks of software development and standardization for Mobile Governance and Rural Empowerment is essential.
IT literacy and access to the Net are powerful growth drivers for any economy. Government should come out with innovative bank loan schemes to finance purchase of PCs and UPS at concessional rates of interest. Plans to give school students a low cost tablet PC have been announced and have to be rolled out with speed. It should be mandatory for every school and college student to have access to the Net. Broadband access in rural areas can be subsidized. Facilities for broadband connectivity and IT education can be set up in a PPP mode at the base of Mobile Towers, since they have full power back-up.
Mobile phones should be treated as an instrument for fostering education in masses. Devices such as 7” tablets and 5” smartphone/tablets should be given to children for free, financed through education cess. Exemptions on VAT on tablets, smart phones are primary requisite to take advantage of mobile revolution. We suggest that all 7” tablets and smart phones/tablets sold to the government for education purposes should be exempted from all duties and taxes. This exemption may not be extended to imported tablets - thus making domestic manufacturing a more attractive option.
Special allocation should be made for a scheme to set up training centres in rural areas for repairs of computers, mobiles and other electronic devices, focused particularly on female youth in rural areas.
(Narendra Bansal is Chairman & Managing Director (CMD), Intex)
Tags assigned to this article:economic slowdown global market labour laws intex central government export market union budget 2013 cxo corner bd13_cxocornerlist manpower training import substitute electronic gadgets investment facilitation flexible policies electricity supply electronics market ups narendra bansal