Powering the dawn of growth?
The Government of India (GoI) is on a mission to make India a $5-trillion economy by 2025. Reaching this zenith without achieving 100 per cent electrification in the country is next to impossible.
The Government of India (GoI) is on a mission to make India a $5-trillion economy by 2025. Reaching this zenith without achieving 100 per cent electrification in the country is next to impossible. Hence, better and strong investment in the power sector in the next coming years will be must not only to make Indian economy stronger, but also raise the competitiveness of manufacturing sector.
Power sector is considered to the pulse of the nation and its wellbeing indicates healthy economy. In the last Union Budget, the Government announced plans to invest Rs 100 trillion in infrastructure in the next five years. This move is bound to push up the demand for electrical and electronics (E&E) equipment as power sector is directly connected with infrastructural development.
However, the growth of E&E industry faces many roadblocks. On the cost and quality benchmark, Indian manufactures are quite competitive. It is the inverted duty structures and low quality imports that are hurting the industry especially SMEs. The industry is at a disadvantage when it comes to customs duty structures. By correcting the inverted duty structures and eliminating zero duty imports and project imports, GoI can provide a level playing field to domestic E&E manufacturers.
Delayed payments are a big drag on the economy. Cash flow is severely affected due to long overdue payments with state and central PSUs. Hence, better contract enforcement and timely payment are must to give a boost to the industry.
Electricity distribution is the weakest link in the country’s power sector, losing almost one-fifth of its revenue because of technical and commercial reasons. Reviving utilities will be the key to ensuring reliable power supplies and improving the financial health of the entire industry.
Past experiences show that we are good at planning, but bad at execution. In 2015, the government announced plan to make struggling power retailers profitable by March 2019 by reducing revenue lost from theft and poor billing to an average of 15 per cent. While such losses did decline, they were still at about 18 per cent at the end of the year to March 2019. Combined net income losses at distributors that signed up for the reform plan in the same year widened to about Rs 280.4 billion, an 85 per cent year-on-year increase, according to a report of the Power Ministry said in a report.
The Government is now reportedly planning to undertake Phase 2 of reforms, which could cost as much as Rs 2.5 trillion ($35 billion) over five years, to turnaround its loss-making power sector. On an optimistic note, we can expect the new set of reforms to deliver desired results and the year 2020 will, hopefully, see the beginning of new dawn of growth.
Against this background, the 14th Edition of ELECRAMA will be held from January 18-22, 2020. To know the latest & exclusive news on the expo, do log on to www.ipfonline.com/elecrama-2020
Also, do visit our stall (Hall 4, Stall No D7A) at ELECRAMA 2020 to share your views & experience.