How PC penetration can stimulate socio-economic growth for India?

• The increase in sales of desktop and notebook from 6 percent to 18 percent CAGR wouldcontribute additional GDP of INR 66,300 crore, taxes of INR 25,000 crore and employment for 1,11,600 people.

• Making PC and broadband more affordable as the present affordability level is INR 5 lakh annual family income to own a PC.

• 36 percent of rural households can afford a PC but still do not own one.

Notwithstanding the growth coming in from an increased sale of tablets and other non PC computing devices, the Indian IT hardware industry can look forward to making a substantial impact by taking some of the steps such as bringing down the hardware cost by 43% with the help of the Government subsidies, reducing the total cost of ownership (TCO) of a PC and broadband solution (currently estimated to be INR 15,650 per annum), providing Income tax exemption to individuals against PC purchase, and promote purchase of PCs amongst specific segments like students and less than INR 5 lakh income households, among other steps, suggests MAIT- KPMG Report titled –“Indian Market Place- IT the unrealized potential”, unveiled by Dr. Sam Pitroda, Adviser to Prime Minister, Public Information Infrastructure and Innovations, Government of India.

The report estimates that in FY 2014-18, there could be an increase in sales of desktop and notebook from 6 percent to 18 percent CAGR contributing additional GDP of INR 66,300 crore, taxes of INR 25,000 crore and generate new employment for 1,11,600 people. However, if the recommendations are implemented by FY 2018, the total number of persons employed would reach 4, 23,500 on average, contributing INR 2, 91,700 crore to Gross Domestic Product (GDP) and INR 1, 10,600 crore in taxes through direct, indirect and induced effects. This would in turn help boost the sales of desktops and notebooks to grow at 7%, resulting in the current installed base of ~48 million increasing to ~76 million by end of FY 2018

Amar Babu, President, MAIT, says, “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”

According to the findings of the report, the current PC penetration in rural India is limited to ~9 million households whereas ~14 million can afford computers, as they fall above the estimated affordability level of INR 5 lakh annual family income. Hence, 36% households in rural areas that can afford a PC still do not own one. Low rural literacy, poor infrastructure and lack of local language product customization are some of the key impediments to rural PC penetration.

Further elaborating the report, Anwar Shirpurwala, Executive Director, MAIT, says, “Increasing the penetration of PCs would not only contribute to the economic drivers but it would carve a path towards a developed and computer- educated society. A better IT infrastructure would lead to life augmentation that would help consumers as well as the Government. Similar to the adoption in the private sector that has taken the lead with banking, online ticketing, services, online shopping, all of which ‘make life easier. On the whole, this would enhance India’s face in the race with the other developed nations of the world.”

Debjani Ghosh, Vice President, MAIT, says, “It’s high time we start extending the reach of PCs to masses who can experience the benefits of computing and connectivity. Coupled with customized modifications of PC, notebooks, and tablets depending on user needs and affordability apart from joint efforts of the government and the industry, this can make a hugely impact the penetration of IT in the country.”