New Delhi: Equitable power distribution and implementing energy efficient initiatives across the country will be a tough challenge for the government to achieve in the coming years. The Union Budget 2008 is being watched by the power and electrical manufacturer’s industry closely to see if some of their critical issues are addressed.
VP Mahendru, chairman & managing director, Indo Asian Fusegear
• Promote usage of energy-efficient compact fluorescent lamps (CFLs)
• To save power the government can reduce excise duty rate on CFL to 4% from the current 8%
• The excise duty on all raw materials for CFL can be reduced from 16% to atleast 8% as was done for complete CFLs in the 2006 Budget; this will make domestic manufacturing cheaper than the imported product and correct the inverted duty structure between raw materials and finished CFL
• Have a uniform value added tax (VAT) across the country: Differential rate of VAT makes it difficult for producers to operate in a fair/level playing field. At times, the government is also at the receiving end when the producers detour their products through a state where VAT is low, thereby losing sizeable amount of taxable revenue; this could be addressed by having uniform VAT
• Government to take steps to reduce import of cheap and inferior quality CFL
• Make BIS mandatory with star ratings for all electrical devices
• The government should make BIS Star ratings mandatory for all electrical devices across the country which will further extend benefits of safe and energy efficient products to the end-consumers
• It should be compulsory for imported CFL to pass through BIS rating test and should also levy an import duty of 100% on these inferior quality CFLs as anti dumping duty measures
• Cut import duty on power distribution equipment and components
• Power distribution system is a critical link between power generation and power consumer. To make the system world class, safe and efficient available at a fast speed, it is suggested to permit import of power distribution equipments at a reduced import duty of maximum 5% . Besides import of components that goes into the manufacturing of the power distribution equipment should also be levied Import Duty at the same rate as of equipments.
At a time when the electrical equipment industry is in a nascent stage to become a world class Indian industry, it is important for the government to ensure that the industry receives all the support in the form of low/nil duty import of raw materials/ components
• More Public Private Partnership in power distribution system: Even if in a small way this will improve efficiency of the power system as a whole; successful execution of incorporating private players in distribution of power to be encouraged by introducing well designed franchisee system for private players.
VP Mahendru is chairman & managing director, Indo Asian Fusegear Ltd