Millennium Post

Rush for LED bulbs upsets local makers

The planned switch from non-Light Emitting Diode to Light Emitting Diode (LED) bulbs, under Prime Minister Narendra Modi’s Domestic Efficient Lighting Programme (DELP), does seem like a brilliant idea. The Centre’s decision to fast-track its implementation, however, leaves Modi’s very own “Make in India” initiative under heavy weather. The conversion to LED bulbs will cut household electricity consumption by thousands of megawatts. Given the long life of LED bulbs – said to be five to seven years each – it will mean a lot to domestic users, especially the poor. The cost, however, is an issue. But the government is prepared to initially subsidise them at the cost of power distribution companies, which are allowed to recover it under monthly installments included in regular electricity bills. So far, it looks good.

The domestic electric bulb manufacturing industry, though, will take about six to eight months to roll out the LED bulb manufacturing programme and meet the staged requirements of distribution agencies and household users. But certain sections of the government are not willing to wait. The rush is sudden and unusual. It does send the wrong signals. These governmental departments seem more interested in quick imports from China than allow a few months for our domestic industry to meet the full quota.

The fact is the government’s immediate procurement target exceeds domestic availability of the product, giving rise to “inevitable” imports from China. As a result, some prospective local manufacturers are turning to importers from China for a quick buck. The “Make in India” initiative to produce LED bulbs will suffer a set-back for the time being, despite the prevalence of many indigenous companies, which are capable of producing them, albeit a few months later.

The current size of the LED production is said to be less than Rs 2,000 crore in contrast to the 12,000-crore lighting industry. Going by official estimates, however, the LED lamp industry alone will hit the Rs 20,000 crore-mark within the next five years. In consonance with the rush expressed by certain governmental departments, our domestic LED industry will not have the breathing time required to meet the Centre’s demands. The Government of India seems to be more interested in quick imports from China than providing sufficient breathing time to local manufacturers. Even some large domestic companies are said to be indulging in imports.

The government’s ways have even upset members of the Micro, Small and Medium Enterprises (MSME) sector, a good number of them being manufacturers of compact fluorescent lamps (CFL) and other cheaper alternatives. Many are ready to switch over and need a little time. Massive imports, however, pose a threat to their new venture. “They (local companies) will be viable only when operating at full production capacity. Why can’t the project start as per domestic availability? No one seems to be concerned with the disposal and destruction of existing bulbs that are going to be replaced by LEDs,” points out Praveen Khandelwal, National Secretary General of Confederation of All-India Traders (CAIT). A twitter addict, Khandelwal has already drawn Union Power Minister Piyush Goyal’s attention to the subject. The fact is, however, Goyal is unlikely to slow down the LED conversion project, unless he receives further orders from Prime Minister Modi.

In Delhi, Prime Minister Modi has already launched a national programme for LED-based home and street lighting through a web system, which seeks to enable consumers in the national capital to register requests for LED bulbs under DELP. These LED bulbs will be distributed in a phased manner from March. The government wants to install LED bulbs for domestic and street lighting in 100 cities by March, next year. The scheme, though, seems to have ignored two aspects – domestic availability and waste disposal. LED will replace millions of old cheaper bulbs. Disposal facilities of waste bulbs at various levels are yet to be cleared. Plastic and electronic waste are already posing a major environmental threat.

In Delhi, LED bulbs will be provided to all domestic consumers at an initial payment of only Rs 10 each. The cost of the bulb is said to be Rs 130 each. The rest (Rs 120) will be recovered from consumers at the Equated Monthly Installment (EMI) rate of Rs 10 each for 12 months through their electricity bills. The open market price of the each bulb is approximately Rs 350. Bulk procurement through agencies will lower the cost to Rs 130. These bulbs will have a warranty period of only three years each. Does a lower warranty period translate into cheaper Chinese imports, the quality of which is often unreliable?

Being a scheme driven by none other than Prime Minister Modi, there is massive enthusiasm among officials in the Power Ministry to make it a quick success along the lines of the Jan Dhan Yojana. Implementation of the LED bulb scheme has been prioritised through all towns with a population of over 100,000 each. An innovative business model has been chalked out by Energy Efficiency Services Limited (EESL), requiring no investment by municipalities. According to official estimates, if all 77 crores of incandescent bulbs sold in the country every year are converted to LEDs, we would save 26 billion KWh (kilowatt hour) worth of energy annually. This will save  our exchequer Rs 16,000 crore at current prices. Commonsense suggests that the government would do well by fully involving local industry and waste disposal facilities and avoid any unnecessary rush for imports. IPA
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