Media Round Table on Budget

Recommendations

Hosted byAlok Bharadwaj, President MAIT

Sabyasachi Patra, ED MAIT

22nd February, 2012

Industry Background

• Industry Size: Global : The Global electronics industry is roughly 2.9% of Global GDP (1.75 tillion/60 trillion USD). It is 4.40 times oil, petrol and minerals.

• India Demand: The electronics demand in India is projected to grow at a CAGR of 22% and reach USD 125 billion by 2014 and USD 400 billion by 2020 with a net imports of over 323 billion USD.

• Significant growth potential: Growth in the industry will boost the economy, as this industry works as a feeder industry for other industries. It is an enabler industry necessary for productivity

• Employment opportunities: It is anticipated that the industry can potentially employ close to 27.8 million by 2020 (3 times from 2010 levels). Job Creation is the vital National Agenda. Also this industry employs a lot of women & young workforce

First Looking at entire ICTE Industry

Domestic IT Industry... Let us examine last year first

Yr 2010-11 Rs Cr $ B GROWTH

IT Hardware 70677 16 28%IT Services 76275 17 19%TOTAL 147152 33 23%

*As per Dataquest

The IT Hardware Growth is estimated now in single digit in 2011-12

PC Market 2011-12... The bad news

MarketSize

2009-10

2010-11

GROWTH2010-11

GROWTH2011-12Revised*

Desktops 5,526K 6,030K +9% -10%Portables 2,508K 3,284K +31% +20%TOTAL 8,034K 9,314K +16% +3%

*As per MAIT revised Estimates The PC/Laptop Market is almost flat in

2011-12 (Last 2 quarters are –ve)

2011-12 washed out for IT

Thailand FloodJapan Tsunami

3 Reasons

RupeeDevaluation

54.221%

Caused Supply line disruptions to entire

ecosystem

Profitability Declined badly

Opportunities for 2012-13... The MAIT Agenda

The Union Budget 2012-12 The need of the Hour

Growth Oriented

Investment Oriented

Reforms & Stability Oriented

7 recommended changes

1. Removal of Anomaly in Inverted Duty Structure & abolish 4% SAD2. Withdrawal of MRP Based Assessment for IT Products.3. Custom duty correction (eg. Lenses & Accessories)4. Abolish MAT and continuance of exemption benefits on Manf in nominated areas/schemes5. Correction on double taxation as goods & as services.6. Confirmation on GST Implementation timelines7. Clear guidelines on transfer pricing to eliminate ambiguity & bring transparency to enhance investors’ sentiments

MAIT Charter for 2012• 1. Launch of e-Waste Information

exchange Portal • 2. Expansion of membership to include

Recyclers, SI, SMEs, Channel Assn, IT Training & R&D Centres• 3. Introduction of 3 Specialized Vertical

Chapters.• Launch Green IT Chapter