For the rapid development of the domestic electrical equipment industry and to enhance its competitiveness, Mr. Praful Patel, Union Minister of Heavy Industries & Public Enterprises launched the Indian Electrical Equipment Industry Mission Plan 2012-2022 on 24th July 2013. The Mission Plan seeks to steer, coordinate and synergise the efforts of all stakeholders to accelerate and sustain the growth of the domestic electrical equipment industry.
Vision 2022 for the Indian electrical equipment industry as articulated in the Mission Plan is to make India the country of choice for the production of electrical equipment and reach an output of US$ 100 billion by balancing exports and imports. The Mission Plan has been evolved by the Department of Heavy Industry (DHI), Government of India, through an elaborate exercise involving all stakeholders and with the support of the Indian Electrical & Electronics Manufacturers’ Association (IEEMA).
Detailed recommendations have been formulated for strategic and policy interventions in five critical areas that need to be addressed by the industry, with support from the government. These are industry competitiveness, technology up gradation, skills development, exports and conversion of latent demand. To carry forward the recommendations arising out of the Mission Plan, two Inter-Ministerial Groups, comprising of representatives of the Department of Heavy Industry and other concerned Ministries / Departments, IEEMA, industry and other stakeholders have been constituted for monitoring the implementation of the recommendations and for periodic follow-up of its status.
Assured availability of quality power at competitive rate is a sine qua non for industrial and economic development. For an efficient and developed power sector in a country of India’s size, a strong domestic electrical equipment manufacturing base is essential.
Considering that the government plans to increase power generation capacity from 235 GW in 2013 to about 400 GW by 2022 with commensurate transmission & distribution capacity enhancement, Indian electrical equipment manufacturers not only have to meet demand of such huge capacity addition, but also that of metros, airports, railways, other infrastructure projects and increase in domestic consumer demand too.
Presently, the domestic electrical equipment industry size exceeds INR 1.30 lakh crore (US$ 24 billion) with the share of generation equipment being about one-fourth and that of T&D being three-fourth of the total. The domestic electrical equipment industry contributed 1.4% to the nation’s GDP in 2012-13 and 9.9% to the manufacturing GDP. The industry provides direct employment to about 5 lakh persons and indirectly to about 10 lakh persons.
Considering the domestic electrical equipment industry’s importance for the power sector, GDP growth and also employment, it is extremely important to ensure that the targeted growth of the entire electrical equipment industry is aligned with the 12th and 13th Five Year Plans.
To enhance industry competitiveness, the Mission Plan calls for providing a level playing field in the country to domestic electrical equipment manufacturers vis-à-vis foreign manufacturers, replacing the L1 criteria of procurement by power utilities in India with two part bidding, augmenting domestic testing facilities to cover the type testing of all equipment, mandating type testing of imported small equipment in Indian labs, supporting SMEs in technology up gradation and testing, standardisation of product ratings and specifications of electrical equipment, providing funds at globally competitive rates of interest to domestic manufacturers, establishing clusters of electrical and component manufacturers and providing them funds for technology up gradation.
For technology up gradation, the Mission Plan recommends a coordinated and collaborative effort by industries and utilities. For any R&D project, the user organisation or main beneficiary should be supported by the government for leading the research in a planned and committed manner. It also recommends public-private partnership (PPP) for fast development of new technology / systems.
Under skills development, it is suggested to set up a Sector Skill Council (SSC), which will undertake skill mapping and interact with the industry to provide training to the workers and also train the trainers / teachers, propose changes in curriculum, etc. It will also arrange for accreditation of the institutes and certification of the students. The Mission Plan calls for greater involvement of industry in the periodic review of the curriculum of technical institutes, summer training of students and for guest lectures by industry experts.
To boost exports of electrical equipment, the Mission Plan recommends providing policy support to domestic manufacturers to enhance their competitiveness in the global market and address issues of quality of the products, high transaction costs, non-recognition of test certificates of CPRI by some countries, high cost of production, high cost of finance, etc. The Mission Plan calls for more project specific lines of credit by the EXIM Bank to other countries with an emphasis on acceptance of equipment / material only from India for such projects.
To convert the latent demand for power in the country, the Mission Plan calls for timely completion of power generation projects and the downstream transmission projects for evacuation of power and improvement in the health of power distribution companies. It recommends the State Governments to acquire land, construct approach roads, and arrange construction power supply and other clearances, with the project developers reimbursing the costs. It suggests that urban areas with high aggregate technical & commercial losses be handed over to private sector on the input-based franchisee model with the provision for investment by the franchisee for system improvement, with the franchisee being asked to set up decentralised distribution-cum-generation (DDG) projects in identified rural areas.