Tags:
Journalism of Courage
MUMBAI, Jan 31: The Centre’s move to brand colour televisions (CTV) as a luxury item on a par with passenger cars in the forthcoming union budget, thereby placing it in the higher excise duty slab, is likely to raise CTV prices by at least Rs 2,000 per set. In recent addresses to chambers of commerce, the union finance minister said that CTV may be treated as a luxury item. CTV prices, which came down recently due to greater indigenisation, may again go up, the Consumer Electronics and TV Manufacturers Association (Cetma) has warned.
A marketing head of a leading CTV manufacturer said, "The demand growth is much higher in the middle-to-smaller towns and in the rural sector. A price rise at this stage will prompt consumers to postpone their purchase plans for the future. While this will adversely affect the CTV makers, a slowdown in demand growth from the small towns and rural sector is something that the companies can ill-afford."
Cetma has also affirmed that a majority of CTV purchasers, as per a recentsurvey, are from the middle-income group which includes labourers, petty traders and small entrepreneurs in the urban areas, and farmers and traders from the rural areas.
Cetma also said that it is unfair to brand CTVs as a luxury item when it is essentially the middle-income people who are upgrading to CTVs. The CTV industry today is one of the very few hardware electronics industries in India that has created backward integration up to the glass-shell level, thereby generating a high level of employment not only in the urban areas but in the rural small-scale sector as well.
The CTV has just bounced back in the last fiscal posting around 20-22 per cent growth rate in 1998 following two years of acute slowdown. The CTV makers have been able to improve their margins through acute cost-cutting and greater dependence on local vendors to cut down on import costs. Cetma has also said that a similar move about a decade ago had driven the industry into a negative cycle growth which took it four long years torecover.
