After a seven-year lull, the electrical equipment industry has bounced back with a double-digit growth in FY18, a release by industry body IEEMA suggests.
The electrical and industrial electronics industry has witnessed a record double-digit growth of 12.8 per cent in 2017-18. Although higher imports still plague the industry but policy changes and various initiatives undertaken by the government and industry are eventually showing signs of revival for the sector. The data is compiled by the Indian Electrical & Electronics Manufacturers’ Association (IEEMA). The production and sales data is collected from its member organisations, which represent 90 per cent of the entire sector, the release said.
A substantial improvement in growth was experienced in the third and fourth quarter of FY18, which resulted in a sharp rise in the performance. During this period, the industry grew by 25 per cent in Q3 and 14 per cent in Q4. The astonishing growth of 12.8 per cent is propelled by growth in segments like rotating machines by 12 per cent, HT Motors 18 per cent, cables 20 per cent and meters 28 per cent.
The government is procuring smart and prepaid meters to be deployed across the country. It has urged electricity meter manufacturers to scale up production in India, as it plans to shift all connections to smart prepaid meters over the next three years. Energy Efficiency Services Ltd has floated two global tenders for procuring a total of 10 million smart meters, the release noted.
Growth is also seen in transmission mission line towers due to increase in demand in the domestic market. The installed generation capacity as on March 31, 2018 is 3,44,002 mw. Almost all sectors are in green after two years of dull period; mainly due to domestic demand. The high growth in Q3 and Q4 is also due to stabilized GST, according to Shreegopal Kabra, President, IEEMA.
The industry’s record performance is attributed to Government’s schemes like DDUJGY, IPDS and Saubhagya where the country is racing to provide electricity to all households. The government unveiled Rs 16,320 crore Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) in September 2017 to provide electricity connection to around 4 crore families in rural and urban areas, by December 2018. Joining hands with government for this cause, IEEMA along with REC has created a North East Cell to give impetus to this growth by emphasizing on distribution in North East.
Sunil Misra, Director General, IEEMA reacting on the industry growth articulated, “We believe that this growth momentum will be sustained since major chunk of transmission and distribution projects are likely to be ordered in next fiscal. However, most of the orders would be through EPC route with more new players entering the business and sub-contracting the same to existing contractors. The sectors seem to be reviving from the dark days. However, there are still concern areas which have led to decline in growth of conductors and insulators.”
At the same time while the growth was there in all the sectors, there was a surge in raw material price in major metals and insulating materials. This has affected adversely the cash flow of the manufacturers thereby affecting the delivery, the IEEMA release added.
