The electrical and industrial electronics industry has witnessed a 7.25% growth in Q2 of the current year versus the previous year and overall 7.82% growth in the 1st half of 2014. Sluggish demand and higher imports still plague the industry but policy changes and various initiatives undertaken are eventually showing signs of evolution for the sector, The data compiled by IEEMA, the apex Indian industry association of manufacturers of electrical, industrial electronics and allied equipment shows that the second quarter growth in FY 2014 has accelerated to 7.24 percent as compared to first half of last fiscal.
IEEMA came out with these growth figures on the production and sales data collected from its member organizations, which represent 95 percent of the entire electrical equipment installed in India. On one side the major drivers are cable, LV and HV switchgear while on the other side Power transformers, Transmission lines and conductors continue to show declining trend. The growth in LV product and FHP motors indicates some industrial activity.
Mr Vishnu Agarwal, President, IEEMA says, “The adverse domestic economic situation and credit squeeze is having a significant impact on the growth of the industry, apart from intense overseas competition. But the sector is slowly positive signs of recovery and India’s position in the global economy is showing signs of stabilizing.”
Mr Sunil Misra, Director General, IEEMA is of the view that “The sector has registered a growth of 7.24% as compared to 2013-14 but huge imports of EHV transformers, reactors, cables and insulators at alarmingly high value mainly from China, Sweden and Germany are worsening the situation. We do not see much positive change visible for at least for 12 to 15 months due to lack of momentum in public private partnership.”
Speaking on a recently held IEEMA Transmission and Distribution Conclave, Dr. Ajit Ranade, Chief Economist, Aditya Birla Group, “The Reserve Bank of India’s policy on inflation control has helped. Going ahead we can expect interest rates to come down. Internationally the commodity prices are falling. Even the coal prices have gone down by 35%. To benefit from lower prices and inflation, we need to boost capital spending. We have a triple bonus due to lower oil prices: lower fiscal deficit, lower current account deficit and lower inflation. This bonus must now translate into higher growth. The Manufacturing sector has been showing positive signal in terms of leading indicators but we await a sustained resurgence. Exports have not picked up as much as required.”
IEEMA recommends that restructuring of discoms and their financial turnaround is the need of the hour. Apparently the addition to power generation has also slowed down mainly due to fuel linkage issues which will have an adverse effect on the growth of heavy electrical equipment industry overall.
|Growth Indices for Electrical Equipment Industry|
|Cumulative Growth Compared to same period of previous year|
|Product||Weightage||April – Sep 2014-15 (% Growth)|
|Overall IEEMA Electrical Equipment Growth Index||100||7.82|