Since India is a signatory to the IT agreement of the World Trade Organisation, the domestic IT industry will hit zero duty regime in the year 2003.

If an action plan is not prepared to encourage investment in domestic manufacturing industry soon, the domestic industry would be wiped out and India would turn out to be a traders nation, vulnerable to sanctions and vagaries of national controlling intellectual property rights, CII has stated in its recommendations to the finance ministry.

CII has suggested setting up of IT Development Bank to fund students for studies in this sector.

According to CII, the IT manufacturing industry has been languishing and fighting for survival not because the country lacks inmanufacturing capabilities or expertise but because the policy regime has never been conducive to the growth and development of this sector.

CII has also recommended rationalisation of excise duty on raw materials and components at 10 per cent from the present 13 to 18 per cent. The depreciation should also be enhanced to 100 per cent for any investment in information technology to encourage purchase from legitimate sources.

According to CII, the IT Action Plan-II, which was prepared by the hardware panel of the national task force on IT and software development, is a cohesive, cogent and integrated proposal. The panel's report envisages the development of a world scale manufacturing base in India through long-term stable policies, simplified procedures and integrated domestic and export manufacturing capacities (S-BIT scheme).

CII has recommended speedy implementation of the panel's report. To overcome the shortage of transponder space on satellites, CII has suggested that the government allow V-SAToperators to use KU and C band transponders as well as utilise transponders on Intelsat. Transponder charges also need to be reduced substantially so as to make V-SAT usage more attractive.

With the year 2000 around the corner, all government ministries and departments, both in Centre and the states need to make a budgetary provision for Y2K guidelines (to be issued by the department of electronics) for hardware, software, communications and networking.