ECONOMIC HIGHLIGHTS

New Delhi, 5 May 2006

Computer Industry

Balanced Development needed

By Dr. Vinod Mehta

There is little doubt that the advent of computers has revolutionized our life styles and made much of the routine task easier.  They are being used almost in every sphere ranging from households and schools to scientific research organizations, in manufacturing and service industry, in agriculture, in the army, government departments, financial sector and so on.

Internet has not only reduced the world to a global village but it has also made it easier for people to shop, make statutory payments, conduct banking transactions, buy air or rail tickets from the comfort of their living rooms.  The computer revolution has led to the creation of data bases in almost every sphere and one can retrieve any specific information from those data bases by pressing a few keys.  For instance, a researcher can find out about any scientific paper published anywhere in the world just sitting in his room at his computer. 

Mainframe computers and super-computers are used by big organizations or scientific research institutions. But it is the personal computers, popularly known as PCs, which is impacting our daily lives.  Because of its numerous applications in our daily lives it is no more a luxury item, but an item of necessity.  Many families have invested in PCs and on laptops. In the past one decade the PCs have become powerful in terms of speed, storage capacity and applications and at the same time they have become cheaper. As a result, now more people can afford to buy at least one computer.  This ensures a vast market for computers in India, but the development of the computer industry has been lopsided.

It is common knowledge that a computer has two components: computer hardware or the machine which includes the processor, monitor, keyboard etc. and the computer software which operates the system as also runs specific programmes like word processing, spreadsheets, databases and special applications software like accounting packages, payroll systems, personnel management, hotel management etc.  Though India has emerged a powerhouse in the development of software as the Indian software engineers and programmers are in great demand all over the world, we are lagging behind even countries like Taiwan, Singapore and South Korea in the production of computer hardware.

This does not augur well for us.  As everyone knows, the heart of any computer is the chip. The technology of chip is changing very fast.  Every other day more powerful chips are coming in the world market. The potential of one chip has not been fully utilized when the next chip has hit the market.  And the production of earlier chip is discontinued.  Since India does not manufacture its own chips and meets all its requirements through imports, the cost of updating or replacing old computers with new ones becomes prohibitively.

The companies which import these chips and other components and then assemble and sell computers in India are in no position to service these computers.  As a result, a computer with a specific chip purchased this year becomes junk in two years because it cannot be serviced anymore.  That is to say half a lakh of rupee invested in a computer today goes down the drain in two to three years because that computer cannot work any more as the production of its chip has been discontinued. With resource crunch everywhere, can our households, educational institutions, and other numerous organizations afford the luxury of changing their computer hardware every one, two or even three years?

This is also true of applications software.  Though India has a large pool of computer software experts who are developing customized software for various applications, but we are weak in the development of general applications software relating to word processing, spreadsheets, and data base management systems which are being imported mainly from the U.S.A.  Almost all the users worldwide, including India, are using these softwares in a big way.

The rate of obsolescence of general applications software is also as high as that of computer hardware.  The US companies selling the general applications software are coming out with newer versions with two or three newer features almost every year.

The question, however, is that when the features of the earlier versions of applications software have never been fully exploited what is the sense in bringing out newer versions?  Every computer user knows that hardly 25 per cent of the features of any applications software are used.  But these companies are forcing the users to go in for newer and newer versions without in any way enhancing the usability to the user.  On the top of it one has to buy one software package for every single PC one has. 

For instance, if one organization has installed ten PCs then that organization must buy ten separate packages of each of the applications software (or buy licence for multiple use) it is using.  Moreover, to check piracy of applications software, the companies selling such software have been inserting codes in their packages which makes the software unusable after a certain period unless the licence is renewed by the user. Since most of these packages are imported against hard currency, it is going to be an unnecessary big drain on the country's resources.

Since computer, especially the personal computer, is emerging an item of necessity, it is high time the Government comes out with a concrete policy to protect not only the interests of domestic individual and institutional users but also of the nation as a whole.

We, therefore, need two sets of complementary policies, one for computer hardware and the other for computer software.  Given the engineering and technical skills in this area it should not be a difficult task.  As regards the computer hardware the Government must lay down technical standards and then encourage the production of critical components like chips, mother-boards, hard disks, disk drives, pen drives, flash cards etc. in a big way.  To attract investment in these areas the manufacture of computer hardware items within the country may be made totally tax free while keeping the present rate of import duties intact on such items.  We should also become a major international player in the computer hardware sector like China.

Similarly, we must also pay attention to the development of general applications software as this software is meant for mass use.  Since India is known for the development of customized software for specific uses as in hospitals, banks etc., there should not be any difficulty in developing standard general purpose applications software packages for word processing, spreadsheets and database managements, so as to reduce our dependence on imported software.  The US general software companies like Microsoft may not like it but we must try. With the necessary software development skills available in the country it is not a difficult task. 

In this way we will not only reduce our dependence on imported hardware as well as software in this critical but "mass use area" of computer applications, but will also help save precious funds as well as save the country from the onslaught of computer obsolescence as well as useless version war of computer applications.---INFA

 (Copyright, India News and Feature Alliance)