Karuna's TV dole has industry all excited

Pundits of fiscal prudence might have scoffed at Tamil Nadu Chief Minister M Karunanidhi's plans to provide free televisions to the poor, but consumer electronics producers are eagerly waiting for the octogenarian leader to keep good his electoral promise.

While roughly 8.2 million televisions are manufactured every year in India, this single order from Karunanidhi - meant for families living below the poverty line - is being pegged at between 6.4 million and 10 million by industry experts. At Rs 5,000 a set, the order could be worth up to Rs 5,000 crore (Rs 50 billion).

The buzz in the market is that Karunanidhi will hand out the first television, a 14-inch curved screen set, on the birth anniversary of reformist leader Periyar E V Ramasamy in September this year. That may or may not happen. But what is certain is that the state government will have to source the sets from more than one manufacturer.

"Even if you club all the manufacturers, they will not be able to deliver 10 million 14-inch TV sets to the government in one year," said Dhananjay Chaturvedi, institutional sales head, LG Electronics India.

Business Standard has learnt that LG had had a preliminary meeting with Tamil Nadu's officials last week.

Gulu Mirchandani, chairman and managing director of Onida, said while he had not been approached by the government, he would be interested in the order at the right price.

Mirchandani added that he would be willing to give a 5 per cent extra discount compared to what he gave his dealers.

However, it is still not clear how the state government will determine the number of poor families that do not have colour TV sets.

A source close to Pattali Makkal Katchi leader S Ramdoss said, "Normally, the yardstick to identify poor families would have been those families that draw rice from ration shops.

"But, in Tamil Nadu families living above the poverty line can also buy rice from the scheme."

The source added that another way of enumerating the size of the tender would be to ask cable operators in specific areas for statistics on TV set ownership.

The Maran family-run cable network, Sumangali, is the biggest in Tamil Nadu. In areas that it does not service, the help of smaller cable operators is likely to be taken to ascertain eligibility of families.

Chaturvedi warned of another issue. With the industry moving to the premium segment, there might be a problem with the availability of tele picture tubes for a 14-inch television.