Slowdown Inelectrical Goods Sector Predicted

The leaders said the increase in generating capacity in the current financial year is expected to be less than 2,500 megawatts, the same level as in 1995-96. This compares poorly with 4,500 megawatts achieved in 1994-95.

The demand for electrical equipment depends largely on the power generating capacity. The expected addition in generating capacity through the implementation of private sector projects is also nowhere in sight.

This, along with a general industrial scenario of liquidity crunch and high interest rates, will put a brake on the demand for electrical equipment.

These views were expressed Indian Electrical and Electronics Manufacturers Association (IEEMA) president P S Jawadekar and representatives of top public and private sector companies in the sector including multinationals. They had gathered last week at the two-day fourth international seminar on switch-gear and control gear, Swicon-96.

H H Schramm, an expert from Germany, delivered the key-note address relating to trends for the year 2000 in this sector.

The event is considered to be important as it exposes the domestic industry to the international technologies and developments in the field. Over 300 delegates from India and abroad participated in the event.

Jawadekar also spoke of the contradiction in the tariff rates of power. He said industry has to pay exorbitant rates even though it costs much less to supply power to it. On the other hand, domestic consumers and the agriculture sector have to pay less while it costs more to deliver power to them.

Subsidised power supply to agriculture coupled with poor revenue collection leaves little surplus with state electricity boards for them to build new plants, leading to slow capacity additions and consequently less demand for electrical equipment.

The manufacturers said the industry at present is surviving primarily because of industrial orders. Therefore, electrical equipment manufactures for low voltage and medium voltage ranges which is required for industrial applications, is still showing growth rates of more than 10 per cent. These products are cables (16 per cent) AC generators (25 per cent) and instrument

transformers (40 per cent).

The electrical industry was experiencing a reasonably good period till December, 1995.

According to IEEMA statistics, many sectors of electrical industry have registered a low growth rate of less than 8 per cent in production during the first six months of current financial year.

In fact, sectors such as transmission towers, large power transformers and energy meters which are considered as indicators of future prospectus have already started showing negative growth rates.

The electrical industry, therefore, apprehends that a slowdown in economy will start exerting pressure of negative trend on all products down the line.