NEW YORK ( Karvy) -- In a world where countries are competing to launch low-cost innovative technologies, India's plans to launch a $35 laptop are facing a hurdle due to disagreements and concerns over cost overruns. The second time since 2008, the government failed to reach consensus with the shortlisted vendors for the laptop's cost.

Speaking to Economic Times, an Indian government official said, "Disagreements on the financial cost with the vendors led to the tender cancellation."

The project, which was announced by Kapil Sibal, India's human resource development minister, was designed by engineers at India's premier engineering institutes. Initially, the laptop components alone were costing vendors $125, excluding import duties and logistics. However, the ministry planned to sell the laptop at $33 a piece.

According to an internal note from the HRD ministry, the shortlisted vendors are now citing additional, unacceptable conditions, the Economic Times reports Tuesday. In addition, a failure to present a bank guarantee of $11.6 million, requested under the government's General Financial Rules 2005, was stated as one of the reasons in the internal note.

The originally planned $35 laptop was based on free Linux operating software, and came with an Internet browser and multi-media player, besides other basic features.
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