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 this programme.
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 it impacts their distribution channels and adversely affects their margins.
While the government’s UJALA scheme of distributing LED bulbs at affordable rates has led to capacity expansion among LED light manufacturing companies, the industry is now feeling the pinch. With the price disparity between lights available under the scheme and those sold commercially narrowing, players say that UJALA procurement is likely to stress manufacturing capacities for the next six to 12 months till the industry volumes grow significantly. However, the government appointed distributor, Energy Efficiency Services (EESL), is in no mood to stop procurement and distribution under the scheme.
During the past two years, India’s LED light production capacity has increased to about 30 million pieces a month as against the initial five million pieces per month. Capacity utilisation has shot up to around 80-90 per cent. Of the total LEDs produced, the government’s procurement accounts for around 50-60 per cent. The price difference between sales through the UJALA scheme and direct retail and institutional sales is about 10-12 per cent.