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Budget blues for lay PC buyers

Bangalore: Friday’s Union budget has little cheer for lay users of IT — the so-called ‘unconnected’ millions on the wrong side of the ‘digital divide.’

Successive Indian governments have made assenting noises at the dream articulated by the U.N. that every human being hitherto untouched by personal computer, mobile phone or the Internet, should join the ranks of the ‘connected’ within the first decade of this century.

But what signals does the budget give? Excited by the galloping growth of mobile phone usage — over 7 million are bought by Indians every month, the highest numbers in the world — Finance Minister P. Chidambaram has slapped an additional one per cent excise duty, calling it a National Calamity Contingent Duty.

Industry is trying to make the entry level phone cheaper by every means possible — it is already below Rs.2,000 — but every rupee of further reduction is a technology and marketing challenge. So it seems unhelpful to single out the mobile phone for this strange levy which will add another Rs.20 to the asking price of the cheapest phones bought by cash-challenged first time users.

Things are no better on the PC front: It took years and successive budgets from 1995 before the duty on software was brought down to zero, to avowedly help fuel the Information Revolution for the ‘rest of us.’

But Mr. Chidambaram has set the clock back by increasing the excise duty on packaged software from 8 to 12 per cent. That means a legal copy of Windows Vista Home Premium, which sells for around Rs. 10,000, will cost Rs.400 more.... which will only encourage many prospective buyers to look for a cheaper alternative — or try to get a pirated copy. The hardware prices will remain much the same since the budget offers no new relief to PC makers.

The net effect is that both phone and PC buyers are in for small price increases. But going by past experience, they will be rapidly neutralised by the steady fall in the cost of all information devices that is an inherent feature of today’s scorching paced technology.

So for lay buyers the situation is “jaise ththey” — as we were — and no wah-wahs this year, for PC ( P. Chidambaram) from PC (Personal Computer) buyers!

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