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Budget to help resolve payment issues of equipment makers, Says IEEMA

Domestic electrical equipment makers expect budget proposals, including the revival scheme for discoms, would help resolve their payment-related issues with power distributing companies.

There will a number of other positive outcomes of the announcements made with respect to the power sector in the Budget, Anil Saboo, the President of the Indian Electrical & Electronics Manufacturers” Association (IEEMA) told PTI.

“We welcome the announcements made in the Budget (for power sector). These will help address several issues of our industry which include payment cycle stress. Power discoms owe about Rs 35,000 crore to our industry,” Saboo told PTI.

The viability of distribution companies is a serious concern, Finance Minister Nirmala Sitharaman had said while presenting the Budget for 2021-22.

In the Budget, the minister proposed a scheme with an outlay of Rs 3.05 lakh crore over five years to revive discoms. The scheme will provide assistance to discoms for infrastructure creation including pre-paid smart metering and feeder separation, upgradation of power systems.

Saboo said the scheme will improve the financial condition of the discoms in the country and as a result of the same, their “payment cycle” to electrical equipment makers will improve.

Another positive impact which the scheme will have on his industry, he said, would be that installations of pre-paid smart metering and feeder separation and upgradation of power systems will increase the demand for electrical equipment manufactured domestically.

“At present, we are able to sell only 50 per cent of our total produced goods in India due to less demand against cheap imported items. But due to increased infrastructure, we will be able to supply more in the market,” he said, without sharing an estimate.

On the proposal of a framework to give power consumers alternatives to choose from more than one distribution companies, the IEEMA President said this will give more power into the hands of consumers.

This will help small units in the country across sectors to reduce their cost of production.

Saboo said in Uttar Pradesh prices of electricity for industry varies between Rs 6-7.50 a unit, while in Rajasthan it is as high as 8.50 per unit and in Punjab Rs 5.15 a unit. However, a choice in choosing a discom will help users both domestic and industrial with cheap electricity and better power supply.

He further said the electrical equipment industry in India is of around Rs 2 lakh crore which provides employment to about 50 lakh people.

“With the focus given on power sector and infrastructure in the Budget by the government, we are hopeful the jobs in our industry will increase by at least 50 per cent in the time to come,” Saboo said.

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