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Our Bureau

New Delhi , April 26

IN a move that could fuel PC market in the country, the Communications and IT Minister, Mr Dayanidhi Maran, on Tuesday said the government-industry panel on improving computer penetration would strive to bring out a Rs 9,999 `no-compromise' PC.

"PC penetration in India is extremely low. While the cellular handset prices have fallen drastically, PC prices have not been competitive enough... A `no compromise' PC at Rs 9,999 will give the required momentum to the PC market and make it more affordable. This PC will not compromise on hard disk, memory space or other features. It will be subsidised by software vendors and chipmakers," Mr Maran said, releasing a report of the committee on improving PC penetration, Internet and software.

The committee will meet periodically to work on the proposed low-cost PC as well as other recommendations, he added.

In its report submitted to Mr Maran today, the committee has mooted the creation of an `India PC programme' with special configuration that can be opened out to component manufacturers for India-specific prices, as part of measures to enhance the country's computer penetration to 65 per 1,000, by 2008. At present, the PC penetration is 14 per 1,000.

The committee has set a target to accelerate Internet penetration to 40 per 1,000 from 5 per 1000 at present, for which it has suggested that all incumbent broadband operators such as BSNL and MTNL be encouraged to move towards a subscription model for broadband and PC as a package.

Mr Maran said PCs might also be made available at an interest-free loan system. The committee includes the Additional IT Secretary, Mr M.M. Nambiar; the Joint IT Secretary, Mr Pankaj Aggrawala, the HCL Infosystems Chairman and CEO, Mr Ajai Chowdhry; the Nasscom President, Mr Kiran Karnik, and the MAIT Executive Director, Mr Vinnie Mehta.

Other recommendations of the panel are incentivising IT manufacturing by offering a minimum five year Income Tax exemption for firms investing in IT manufacturing and extending the tax holiday by another ten years if the company engaged itself into exports of hardware; limiting procurement of PCs and related products that are funded by the Central or State Government to products which are locally manufactured and reducing the total tax burden for sub-Rs 10,000 PCs.

It has also suggested that Government servants and public sector employees be offered loan schemes (at all employee levels) for encouraging PC adoption and recommended post offices, employee provident funds and other savings funds as alternative ways of funding PC adoption.

The committee also believes that the Income Tax Act should be amended to include deduction of home PC purchase price under the recently created Section 80C till 2010. It has also called for a 100-per cent depreciation on IT investments for small and medium businesses and social sectors to reduce the cost of PC.

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