More than seventeen years after India turned its back on the ?licence raj? and opened up industry to global competition, the country?s manufacturing sector is still at the mercy of state-appointed boiler inspectors with unfettered powers to shut down industrial units. This situation continues, despite a long-pending move to amend the Indian Boilers Act of 1923 being cleared by Parliament last November, as the Centre is yet to notify the changes in the law.
The Indian Boilers (Amendment) Act 2007 seeks to allow independent internationally accredited agencies to inspect and certify the boilers for safety. Amendments to the obsolete boiler legislation were first mooted way back in 1974. A Bill to reform the Act was originally placed in the Rajya Sabha in 1994, but remained in cold storage for thirteen years after that.
?The amended Act allows third party certification agency to operate in addition to inspectors. We are still in the process of notifying the amendments,? Ajay Shankar, secretary in the department of industrial policy and promotion (DIPP), told FE on the sidelines of a FICCI conference. Globally, inspection of boilers is done by internationally recognised private agencies with uniform standards.
DIPP has the responsibility to notify the amended Act, which will also lead to a reconstitution of the Central Boiler Board (CBB) ? currently dominated by a very powerful inspector lobby. The reconstituted Board would lay down the new regulations for implementing the law. The Act applies to makers and users of boilers, including power plants, railways, paper, textiles, chemicals, food processing, and hospitals.
Boilers were put on the concurrent list of Centre-state subjects in 1935 and accordingly, state governments had been consulted before the amendments were moved in Parliament. By the time, Gujarat, which had been waiting for the Central law to change all these years, had given up and formulated its own law on the subject, abolishing boiler inspectors? powers in February 2007.
Though the bill was cleared in the last winter session, parliamentarians from states with high density of boiler manufacturing units like Tamil Nadu, Maharashtra and Andhra Pradesh had strongly opposed the changes while debating the legislation.
?There would be no solution to the power sector problems unless you solve the administrative problems (like inspector raj over boilers) that are creating roadblocks in the whole process,? heavy industries secretary Satyanarayana Dash had told an industry gathering in May.
?Boilers and pressure vessels form an important element of many infrastructure and industrial segments, including power, fertilisers, paper, cement, petrochemicals and refineries. Considering the overall demand patterns, there is a need to substantially augment the existing indigenous manufacturing facilities as well as create additional capacity by new players not just in boilers, but all associated equipment required in thermal power plants,? Dash had said.
According to a senior power ministry official, the DIPP may be going slow on notifying the changes in the law as ?some states are opposing it even now, the loudest opponent being West Bengal .?
The primary aim of enacting the law 84 year ago was to ensure safety of users of boiler, which were mainly imported in the country at that time. The 1923 Act gives sole discretion to inspectors to shut down a unit for inspection, as well as name agencies that should be appointed for repair and maintenance work of boilers. Though responsible for certifying boilers for safety, not a single inspector has ever been prosecuted despite several cases of boiler explosions.
In order to avoid inspection, several industries resort to using boilers with capacities just below the regulatory limit, but only at the cost of inefficiency in terms of energy consumption and safety hazards. In May this year, Congress MP and industrialist Navin Jindal had pointed out that the 1923 law was introduced when ?rivetting, not welding? was the prevalent practice.
?The inspector raj must end. The new law would mean a boiler needn?t be stopped every year. This alone should increase power plants? generation by 3-4% and result in Rs 2-3,000 crore annual savings for the power sector – not to mention the impact on the rest of the industry,? Jindal had pointed out.
India has around 70,000 registered boilers and only 250 boiler inspectors. While Indian manufacturers have to get clearance from global agencies for exporting boilers, they need local inspectors? certification to sell in the domestic market.
The Indian Boilers? Manufacturers Association has been pleading with Commerce and Industries Minister Kamal Nath to at least allow boiler users and makers the freedom to choose between the international agencies already present in the country or the state inspectors. IBMA has also asked for placing an Insurance Regulatory Development Authority representative on CBB as insurers have to pay for the damages from faulty boilers.
