Consumers paying Rs 80-90 per LED bulb, not Rs 50 as claimed by PM

Rs 50 is ex-factory price, excluding excise, transportation and distribution costs

In his power-packed Independence Day speech, Prime Minister Narendra Modi said the price of energy-efficient LED bulbs has dropped from Rs 350 to Rs 50, following his government’s intervention. But it turns out the actual price of an LED bulb is 60-80 per cent higher than Rs 50, depending on the state where one buys it.

“Those working on the LED technology research invented a bulb for the benefit of common man. LED bulb was expensive and used to sell at Rs 350 a bulb. Who would buy these costly bulbs? Government thought over it. If LED bulb can change lives in India, change environment in India, improve the economy, then it was necessary to make some efforts towards this direction,” Modi said in his address to the nation from the ramparts of Red Fort.

“In the government system of functioning, there are things where government should not interfere, but it does. And where intervention is required, it doesn’t. We are trying to change this work culture… I want to ask where all this money was going,” the PM said.

According to LED manufacturers, prices have come down mainly because of lower technology costs, more competition and massive procurement. The ex-factory price of these bulbs is Rs 50. After including excise, transportation and distribution costs, each LED bulb is being sold at Rs 80-90, said an executive in one of LED manufacturers.

When asked, Saurabh Kumar, managing director, Energy Efficiency Services Ltd said, “The speech should be rightly interpreted. The cost of LED bulb has dramatically come down because of transparency and governance; that was the intent of Prime Minister’s speech.”

Two years ago, procurement cost was Rs 310 per LED bulb. According to Kumar, EESL has procured 180 million bulbs and prices have come down because the volumes have gone up. Some 50 million bulbs have been procured at Rs 50.50 per unit by EESL. Bids for another 50 million bulbs are in the process of finalisation where the price is expected to come down further, though not so dramatically.

Globally, there are five to six companies that make the integrated-circuited chips or lumens. These chips are largely imported, after which some 80 per cent value addition is done in India. Companies like Surya Roshini, Philips, Orient and Osram are in this market.

Kumar also highlighted that the failure rate of LED bulbs was just 0.3 per cent. “Earlier, a 7-watt lamp was giving 85-watt efficiency. A 9-watt lamp was now being procured with 100-watt efficiency. Yet, prices have come down,” he said.

LED bulbs are distributed under the NDA government’s Ujala scheme. Seventeen states and four Union territories are part of the programme. According to EESL, 400,000 bulbs are being distributed every day. The use of these bulbs is estimated to save 3,900 Mw of power, leading to an annual saving of Rs 7,990 crore.

A LIGHT OVER FACTS

• In his Independence Day speech, Prime Minister Narendra Modi said the price of LED bulbs has dropped from Rs 350 to Rs 50
  

 

But consumers paying 60-80 per cent higher
 

Ex-factory price of each bulb is Rs 50.50, excluding excise, transportation and distribution costs
 

Prices falling mainly because of lower technology costs, increased competition and massive procurement
 

Two years ago, procurement cost was Rs 310 per LED bulb
 

Govt agencies have procured 180 million LED bulbs
 

Price is expected to come down further, though not dramatically