Electrical manufacturers expect budget proposals to spur revival

Our Corporate Bureau

Mumbai, May 17: THE Indian Electrical & Electronics Manufacturer’s Association (IEEMA) expects the industry to revive following the recent Accelerated Power Development Programme (APDP) announced by the finance minister in his budget.

IEEMA president Rajesh Jain said: “We welcome the resolutions adopted in the chief ministers and power ministers conference on March 3, 2001. It was agreed that there is urgent need to depoliticise power sector reforms and speed up their implementation. We also appreciate the government decision on 100 per cent metering. If speedy implementation of these reforms are done and reviewed quarterly, I anticipate positive growth in the industry. The government accelerates the actions and monitors the same through periodic quarterly review so that the the funding is channeled properly for stimulation of demand.”

IEEMA hopes that the inter-locks provided in the APDP will motivate the states to implement restructuring of electricity boards since health of electricity boards is very crucial for the prosperity of the Indian electrical industry.

The association welcomes globalisation and competition. However, it fears that without a proper import duty structure, import of equipment will be more attractive as is already happening in some of the products.

According to IEEMA Industry Review Update, in the past three years, the industry has been passing through an extremely difficult period with lower production levels, fewer orders, delayed payments and diminishing profit margins. The industry today is either stagnant or reporting negative growth with many companies operating at capacity levels less than 50 per cent. The scenario for the Indian electrical industry continues to look grim in the current year with major sectors of the industry showing no signs of recovery and reporting negative growth of 4.7 per cent this fiscal as compared to previous year.

The fortunes of the electrical industry are directly linked to the state electricity board whose financial health is precarious in majority of the cases. This in turn has led to the cash flow problems for the suppliers and consequently resulted in intense competition and gross under utilisation of capacities. In addition to this, the rising cost of the inputs like power tariff, raw material etc is adversely affecting the industry. In 2002, IEEMA will host ELECRAMA-2002 the largest exhibition of electrical and industrial electronics industry in Asia, Africa and Middle East.