Two major events
concluded last month—Union Budget: 2016-17 and Elecrama: 2016.
Both had their
impact, a positive one, on the electrical equipment industry.
This year’s Budget
has duly addressed India’s core—its villages. Boosting farm income,
intensifying village electrification, accelerating pending irrigation projects
were amongst several proposals outlined in the Budget that will definitely
boost—directly or indirectly—the electrical equipment industry. One much
appreciate that socio-economic empowerment starts with an electricity
connection. Electricity consumption is an efficient indicator of socio-economic
progress—be it a household or an entire nation.
Mega events like
Elecrama—widely dubbed as the largest power T&D show in the world—have never
failed to have an uplifting effect. When one sees the enthusiasm of over 1,000
exhibitors and the unremitting interest of over 1 lakh visitors, one does feel
that the industry is innately optimistic of prospects. Even in 2008, when the
world was in a firm grip of unprecedented recessionary pressures, Elecrama was
fairly insulated from the depressing environment and progressed with little or
no impact on the enthusiasm of exhibitors and visitors.
equipment industry can safely look forward to steady demand arising from basic
village electrification right up to high-voltage interregional transmission
lines. At this point it is worth mentioning that financially-challenged state
discoms have tremendous opportunity to turnaround with the Ujwal Discom
Assurance Yojana (UDAY) scheme. So far, twenty state governments have conveyed
their in-principle approval in joining the scheme while seven states—Rajasthan,
Uttar Pradesh, Chhattisgarh, Jharkhand, Gujarat, Bihar and Punjab—have formally
subscribed to UDAY. If all goes well, one can expect atrophied discoms to
restructure themselves, leading up to revival and acceleration of their
procurement process. Most importantly for suppliers, payment cycles of discoms
are bound to improve. This will create a healthy procurement-payment routine
that will help all stakeholders—utilities, suppliers and consumers.
The government is
poised to step up procurement of electrical equipment in the years to come.
After the stupendous success of the LED procurement programme where the
government is procuring 6 lakh bulbs per day, the power ministry is expected to
roll out its massive procurement for distribution transformers and energy
meters. The LED drive is a great example of how mass procurement done in a
transparent manner can spur efficiency. When the procurement started, the cost
of one LED bulb averaged at Rs.399. This has dropped to Rs.99 per bulb with
manufacturers confidently offering their rock bottom prices thanks to
transparency in procurement and prompt payment schedules.
There is no dearth
of opportunities for electrical equipment manufacturers in the foreseeable
future. While India is proving to be a huge market, the opportunity in other
developing nations, especially African ones, is equally lucrative. Indian
manufacturers should focus on superior quality, techno-commercial efficiency
and global competitiveness. Business growth will take care of itself.