With the procurement under the Unnat Jyoti by Affordable LEDs for All (UJALA) scheme squeezing their captive distribution channels, the LED light manufacturers have asked the government to go slow on the same.
Represented by the Electric Lamp and Component Manufacturers Association of India (Elcoma), players like Havells India, Surya Roshni and NTL Group, among others recently approached union minister for power Piyush Goyal requesting the government to reduce procurement under the scheme as the same is impacting their distribution channel and affecting margins.
Moreover, while the government’s Ujala scheme of distributing LED bulbs at affordable rates has led to capacity expansion by LED light manufacturing companies, the industry is now feeling the pinch.
With price disparity between the scheme and commercial sales narrowing, players say, the same is likely to create stress on the manufacturing capacities for the next 6-12 months till the industry volumes grow significantly. However, government appointed distributor Energy Efficiency Services (EESL) is in no mood to stop procurement and distribution under the scheme.
During past two years India’s LED lights production capacity has increased to about 30 million pieces a month as against the initial five million pieces. Capacity utilisation has shot up to around 80-90 per cent while out of total production, government’s procurement is around 50-60 per cent.
However, due to uncertain availability of regular orders which cannot be projected in case of tendering process, companies are not planning for any further increase in capacity till the market other than government procurement stabilises.
Price difference between sales through the Ujala scheme and direct retail and institutional sales is about 10-12 per cent while realization difference is about 3-4 per cent.
However, EESL will continue procurements and has no plans to stop or reduce the same under the scheme in near future.
By Baishakhi Dutta
