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Electrical equipment makers see sharp drop in growth

The growth in the production of the Indian electrical equipment industry has fallen to 0.9 per cent in the third quarter of the current fiscal against 9.8 per cent in the second , according to the Indian Electrical and Electronics Manufacturers’ Association.

IEEMA is an 800-member organisation, which represents 95 per cent of the INR 1.30 lakh crore Indian electrical equipment industry. After a weak growth of 2.2 per cent in the first quarter , mainly on account of growth in exports, the rise in Q2 growth was due to rise in domestic demand. But, with the 0.9 per cent fall in the third quarter on account of procurement delays and rising imports, the cumulative growth in the first nine months of this fiscal has come down to 4 per cent from 6 per cent in the first half of 2013-14.

Discoms in trouble

Sunil Misra, Director-General, IEEMA, said the drop was due to the delays in project execution and non-adherence to payment schedules. The cash flow position of manufacturers would remain grim and availability of bank credit would be a huge challenge, he added. “Once the discoms become financially strong, they can invest in upgrading technology and implement smart devices. This would not only improve quality and availability of electricity, but also reduce cost to some extent.”

Source-On Request