A marketing head of a leading CTV manufacturer told The Financial Express: "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." Industry association Cetma has alsoaffirmed that a majority of CTV purchasers, as per a recent survey, 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 has 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 upto 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 industryinto a negative cycle growth which took it four long years to recover.

Further, a negative growth in the CTV segment may have a detrimental effect on the small-scale units. The CTV makers, in an effort to reduce costs, have increased their dependence on these units for sourcing components. Local vendor development, as a result, has become an essential activity for any CTV producer.