Power: Satisfactory in parts

Hindsight: The electrical equipment industry, after experiencing a healthy growth since 2009-10, declined to -7.8 per cent in 2012-13.

However, the industry revived in the first half of current fiscal (H12014) and grew at 6 per cent mainly backed by rise in domestic demand.

Thumbs up:

1. Introduction of import duties at the rate of 5% basic customs duty, 12% countervailing duty and 4% special additional duty, along with cess as applicable, on import of equipment for UMPPs and MPPs.
2. Revision of standards for Case-II power projects, including UMPPs, whereby domestic sourcing of equipment is made mandatory.
3. Cabinet Committee on Investment´s (CCI) expediting projects over Rs 1,000 crore by setting timelines for concerned ministries.

SPECIFIC concerns:

1. Growing threat of low-cost electrical equipment imports coupled with L1 bidding criterion adopted by the utilities.
2. Poor financial health of state distribution utilities. Recent reports indicate the Financial Restructuring Programme (FRP) has hit a roadblock.
3. Bunching of orders should be avoided as this leads to suboptimal utilisation of manufacturing capacities.

Modi effect? I believe that political parties have now realised that achieving economic growth is very crucial to gain voter support. Irrespective of whichever party comes to power, the performance of the economy will improve going forward.

Ramesh Chandak, MD, KEC International