Though the stimulus package did not address any of the issues of the IT hardware industry, which has been witnessing a downturn, the overall measures taken by the government to improve the condition of the economy will have an indirect effect on spurring demand. The cut in repo and reverse repo rate will lead to easing of interest rates, which will help in boosting demand.
?The key issue troubling the industry was the impact on the SMEs. Though, high interest rates was not such a big issue, the liquidity crunch was severe. With the government announcing steps to address all these issues steps, the situation should improve,? said Sandeep Aurora, director, sales and marketing group, South Asia, Intel.
The last quarter of the financial year is historically strong for the industry as a lot of public sector spending takes place before March 31. Though the government sector is largely recession-proof, the spending on IT hardware like desktops, laptops, printers etc by corporates and consumers has been witnessing a slowdown for the past few months.
?Consumer financing is not that big a problem for us. What is required is an overall change in sentiment, which has turned negative off late. Once people realise that their jobs are safe and the situation is manageable, it will boost demand automatically,? said Devita Saraf, director, Zenith Computers. Aurora added that in the BPO sector and exports relates industries were seen to cut down on spending. ?These steps will go a long way in improving the situation,? said George Paul, executive vice-president, marketing, HCL Infosystems.
The first stimulus package announced by the government had cut the excise duty by 4%, which lead to several players reducing the prices. Combined with the measures announced today, industry experts said that they expect a positive impact on the domestic front.
