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Mr P.K. Sandell, Chairman, Assocham Electronics Committee, flanked by Mr Dilip Ghosh (right), Director, Siemens, and Mr Rajesh Tulli, Managing Director, Coral Telecom, at a press conference to release a paper on `Electronics Industry' in the Capital on Friday. — Ramesh Sharma

New Delhi , Feb. 10

ONLY about half the demand of around Rs 100,000 crore in the electronics component sector is met by ``production'' undertaken locally, industry chamber Assocham has said and added that the electronics industry needed to pull up its socks to stay profitable.

The Assocham Electronics Committee Chairman, Mr P.K. Sandell, while releasing a research paper on the electronics industry brought out by the chamber, said as high internal taxes suppress demand, a huge trade deficit of $10 billion in the electronics related sector threatens to grow further. He further urged policy makers to focus on building the electronics industry so that it can compete with the growing economies.

The current tax regime in the domestic electronics industry, including high sales tax, VAT and excise, is highly unfair as it restricts growth due to the inadvertent tax structure, the paper, adds.

The chamber further said the 21 million jobs could be created within the country over the next 10 years if a majority of the demand is met through local production.

This demand would need 70,000 enterprises of an average Rs 3 crore investment each.

Today electronics production at $11.2 billion adds only 1.7 per cent to the GDP, which is in sharp contrast to South Korea at 15.1 per cent, Taiwan at 15.5 per cent with even China at 9.6 per cent.

According to the paper, the demand for electronics would be fuelled by the growth of telecommunications (250 million subscribers by 2007), PCs and notebooks (at least five million every year), broadband connectivity reaching rural areas (600,000 village knowledge centres by 2007), among other sectors.

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