“It is pertinent to restrict imports, particularly from China”
R K Chugh will take over the post of the President, Indian Electrical & Electronics Manufacturers’ Association (IEEMA), on September 17, 2019. In this interview, he explains why electrical equipment industry and SMEs are going to be the game changer for tomorrow.
How do you view this year’s budget?
The budget is an interesting mixture of a number of incremental and some path breaking steps. It has a message in undertone indicating desire for deeper engagement with what the Finance Minister termed as “wealth creating "organs of society. Stress on faceless tax assessment, replacement of E-way bill with electronic invoices, interest subvention for MSME, boost to infrastructure spend, domestic manufacturing of EV under FAME 2, rail transportation augmentation, credit security for MSMEs, push to housing, etc will have positive impact on growth story.
From pre-budget survey, we heard that India is seeking investment led growth instead of consumption driven growth. Export enhancement by orders of magnitude should be the principal tool of such strategy. However, no clear policy initiative in this direction was visible.
How do you analyse the performance of Indian electrical and electronics (E&E) industry in 2018-19?
While Indian power transmission & distribution equipment industry foresee growth, one of the major deterrents in realising the same could be imports. Though total imports increased significantly from Rs 55,608 crores in 2017- 18 to Rs 71,570 crores in 2018-19, the rise in imports can be majorly attributed to ‘Project Imports’ which constitute about 11 per cent of total imports in 2018-19. On the strength of huge spent announced in the budget for infrastructure & expected reforms in power segment by the government, 2019-20 and subsequent years also should see robust growth.
Are imports a real threat to the growth of Indian E&E industry? How are FTAs (Free Trade Agreements) hurting domestic E&E industry?
Keeping in mind the global, political & economical dynamics between major countries in globe, it is even more pertinent to restrict imports, particularly from China. Else we could see increased level of dumping at unrealistic price levels, difficult to match for Indian industry. Apart from re-looking at the tariffs, there is a dire need to implement NTBs (Non-Tariff Barriers) also on the principal of reciprocity with China. This would also ensure some headway towards increase in export potential from Indian electrical industry to China when they would be compelled to ease out non-tariff barriers at their end.
Is government taking adequate measures to foster growth of SMEs in E&E sector?
Electrical equipment industry and the SMEs are going to be the game changer for tomorrow. For any industry to sustain and adopt new technology, they require finance and SMEs are no different. In this current scenario, there is a huge trust deficit between the banking segment and any industry. SMEs, which account for around 85 per cent of the electrical equipment industry, are battling multiple headwinds today. First, poor financial health has limited the ability of most state-owned power distribution companies (Discoms) to undertake last-mile reforms - for improvement of quality of supply voltage, distribution loads, the billing process and prevention of pilferage. This has weakened demand for the MSMEs whose products find use in last-mile power distribution applications.
What will be the highlights of Elecrama 2019?
ELECRAMA for long has been focused on relevance to its constituencies by providing relevant showcasing of product and technology as well as strengthening the knowledge quotient by a suite of concurrent and professionally managed events that feature some of the world’s renowned experts and thought leaders. ELECRAMA-2020 also introduces a couple of new initiatives and conferences that reach out to some of the key constituents of the global electricity business.