The industry was seeking duty rationalisation for a long time, said Indian Electrical & Electronics Manufacturers' Association (IEEMA) president Premchand Goliya. He hoped that the Government would eventually introduce a single rate of excise for the electrical industry.The industry has also welcomed the 5 per cent customs duty for equipment imported (under project imports), which includes the once-exempt fertiliser projects.

"It will make the local industry competitive as manufacturers must pay duty on raw material and excise," said the association's secretary general S More. In its pre-budget memorandum, the association had demanded a single rate of excise duty of around 13 per cent for all electrical products. It had also demanded withdrawal of restriction on Modvat creditfrom the present level of 95 per cent, which has been fulfilled, he added.

The 3 per cent rise in excise from 13 to 16 per cent will be difficult to recover from clients who have placed orders, said Crompton Greaves president, power systems, Ranjan Dasgupta.

The rationalisation has, however, provided a level-playing field in many cases, he said, adding that the full impact of the budget on the industry is yet to be analysed.At the same time, in case the product is sold under the deemed export category, getting this refunded has been a nuisance, said Emco Transformers' G Venkatraman.

The growth of the industry is directly linked with other sectors, especially power. The demand for electrical products in the local market has fallen substantially.

Though the budget has not been able to directly boost demand in the domestic market, the move to confer infrastructure status on transmission and distribution and relaxing the norms for tax holidays is expected to help the electrical-equipment industry, Moresaid. There has also been a stress on more investment in the infrastructure sector, which will help the industry, he added.

The budget will help boost exports of electrical equipment. "Exports will be more attractive now with pre- and post-shipment credit interest rates available on a par with international rates," he said.