PC sales log 46% growth in Q2: MAIT

A total of 2.96 million personal computers (including desktop computers and notebooks) were sold between April-September 2006, with 1.75 million units being sold in the second quarter itself - registering a growth of
46% over the previous quarter and 19% year-on-year (YoY).

Revealing the findings of the Industry Performance Review for the first-half of FY07, the Manufacturers Association for Information Technology (MAIT) attributed the buoyant mood in IT consumption to a significant growth in notebook sales, which grew 180%, and consumption of desktops that grew 8%. PC sales are projected to cross 6.5 million units in fiscal FY07, given the strong macroeconomic conditions and buoyant buying sentiment in the market, led by demand from various industry verticals. In the second quarter, desktop sales crossed 1.5 million units with 48% sequential growth while notebook sales totalled 0.25 million units with a 38% sequential growth.

Demand was highest from the telecom, banking and financial service sectors, education, retail and BPO/IT-enabled services, and rose also on account of some major e-governance initiatives of the Union and state governments. The southward trend in pricing continued during the year due to technology reasons. Further, significant consumption in the small and medium enterprises contributed to the industry growth and consumption in the home market remained buoyant.

Commenting on the need for a strong domestic IT market to strengthen India's hardware manufacturing industry, MAIT Executive Director, Vinnie Mehta, said: "Domestic demand is likely to gain tremendous momentum in 2007 which has been declared the 'Year of Broadband'.

" Mehta added he "welcomes the clearance of the Fab policy and expects the details of the policy to be announced without much delay".

"The industry is also eagerly awaiting the long overdue policy for the manufacture of IT and electronics products. The above two policies could play a critical role not only in boosting highly capital-intensive activities like the manufacture of semiconductors, LCDs, storage devices and so on, but also in expanding the consumption of IT goods and services in the country," he said.

MAIT President, Mukul Singhal, urged the government that in the forthcoming Union budget, the status-quo shold be maintained on tax structures for IT products including the continuance of a reduced excise duty of 12% on PCs. "All IT products should attract the same rate of  VAT across the country and the confusion over applicable VAT rates, which has arisen from the changes in Harmonised System of Nomenclature (HSN) from January 01, 2007, must be cleared.

Accordingly, the VAT rate on IT products must be restored to the earlier 4% level immediately. Further, the levy of central sales tax (CST), which with its cascading impact, is a major deterrent to local manufacturing, must be removed immediately," he said.