Electrical industry expectations unfulfilled: IEEMA | SupportBiz

Policy Notes

Electrical industry expectations unfulfilled: IEEMA

The downturn in the demand for domestic electrical products and increase in imports have spelled out double trouble for the Indian market for electrical products, resulting in negative growth of -6.14% over the last nine months. This kind of negative turn has become visible for the first time in the last decade.

In the  backdrop of such negative industry sentiments, the Indian Electrical & Electronics Manufacturers’ Association (IEEMA)  stated that the industry is generally disappointed with the Union Budget 2013-14.   It states that the budget does not provide the desired impetus  for growth, sustainability and viability.

JG Kulkarni, President, IEEMA, says, “We were hoping for some corrective measures to revive the downturn in the domestic electrical equipment industry, which is reeling under the  onslaught of the slowdown in the country’s power sector, which has depressed domestic demand. Additionally, the rapidly escalating imports of electrical equipment have further worsened the situation. This has resulted into underutilisation of the manufacturing capacity for electrical equipment.”

“We were expecting some favourable announcements in the budget for countering increasing imports of electrical equipment. It was also expected that service tax exemption would be granted to all projects covered in power generation, transmission and distribution, in line with the exemptions provided to other infrastructure development projects,” Kulkarni adds.

On the contrary, Sudhir Tangri, Country Manager, Electronic Measurement Group, Agilent Technologies India, finds the  budget a positive  one. Sudhir says, “Given the present economic climate, the Union Budget 2013-14 is great leveller. For a young and growing nation like India, emphasis has been rightly placed on skill-development, job-creation, infrastructure  and investments. For the electronics industry too, the budget encourages the set-up of semi-conductor fabrication units by proposing  zero customs duty on the imports of  plants  and machinery for the same. The setting-up of these fabrication units would be a shot in the arm  for the electronics industry in India.”