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The government has constituted a high-powered group of ministers to ensure speedy clearance of the hardware report prepared by the Prime Minister's Information Technology Task Force.

The 'group of ministers' comprising Finance Minister Yashwant Sinha, Communication Minister Jagmohan and External Affairs Minister Jaswant Singh among others will undertake a fast paced exercise in order to incorporate revenue related provisions like change in duty structures in the forthcoming budget.

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The recommendations on hardware had formed part of the second report of the task force and were presented to Prime Minister AB Vajpayee on November 3.

Many of the key recommendations, including the pathbreaking proposal of 'soft-bonded information technology' units for hardware manufacturers, have come in for a lot of flak from the finance ministry.

The task force, in order to provide a fillip to domestic hardware companies, had suggested a number of sops including this scheme.

Sources contend that the S-BIT scheme alone would bring in revenues of nearly Rs 8 billion, besides promoting foreign investment in hardware manufacture.

This will be mainly possible due to the organised domestic manufacturing market share rising to 70 per cent as grey market operators would shift to the S-BIT scheme to avail of the zero duty structure proposed in the scheme.

IT Task Force members have held a series of consultations with the finance ministry and other government departments in order to sort out the differences and arrive at an early consensus.

The finance ministry has sought a 15-page clarification from the task force on objections pertaining to the much-vaunted S-BIT scheme.

The revenue department has assumed Rs 6 billion loss if the scheme is to be implemented.

Besides revenue implications, the customs department has also voiced its concerns over "improper use" of the proposed green channel facility.

However, sources insist that this is unlikely to happen because most of the prospective S-BIT companies are reputed domestic and multinational computer manufacturers.

The scheme will be monitored by the Department of Electronics and has laid out specific criteria under which companies with proven record of accomplishment would be eligible to invest in the S-BIT scheme.

The labour ministry is also opposed to certain clauses related to contract labour and the western style "hire and fire" policy that the report seeks to introduce in the country.

The setting up of the group of ministers is certain to perk up hardware manufacturers and allay fears.

But, industry wants the entire report to be implemented as a package and that may not happen.

- Compiled from the Indian media

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