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Looking forward with hope and optimism

EM news bureau ,  Thursday, March 10, 2016, 15:00 Hrs  [IST]

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.

The electrical 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.

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