India set to become fifth largest manufacturing country

Sunil Misra, Director General, IEEMA

“Transparency has been the major driving factor behind this government’s major reform initiatives”

The Indian government has set an ambitious target of increasing the contribution of manufacturing output from 16 per cent to 25 per cent of Gross Domestic Product (GDP) by 2025, believes Sunil Misra, Director General, IEEMA.

Transformation in power
The industry’s record performance is attributed to government schemes such as DDUJGY, IPDS and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), where the country is racing to provide electricity to households in the villages. The government unveiled ₹16,320-crore Saubhagya scheme to provide electricity connection to around four crore families in rural and urban areas by December 2018. Joining hands with government for this cause, IEEMA along with REC has created a North East Cell to give impetus to this growth by emphasising on distribution in North East.

Moreover, the electrical equipment manufacturing technology is witnessing significant modernisation. Technological advancements and policies on emission reduction will influence the future direction taken by the power sector and electrical equipment industry in various countries.

Manufacturing sectors a boon to GDP
The Make in India programme has placed India on the world map as a manufacturing hub. It has given global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of 2020. The government has set an ambitious target of increasing the contribution of manufacturing output to 25 per cent of GDP by 2025, from 16 per cent currently. India’s manufacturing sector has the potential to touch $1 trillion by 2025. There is potential for the sector to account for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs by 2025.

Transparency a major driving factor
The largest contributor in India’s power reforms story is the government’s Ujwal DISCOM Assurance Yojana (UDAY) for turnaround of state distribution entities that were considered as the weakest link in the entire chain of power sector reforms. Transparency has been the major driving factor behind government’s major reform initiatives.

Acceptability electricity from non-conventional
Policy initiatives in the area of solar rooftop off grid power generation, energy storage, e-mobility and required charging infrastructure based on renewable energy are driving the agenda forward. Also, the government slowly changing its role from being a regulator to facilitator is commendable.

Awareness has played a great role in advancing the usage of renewable energy. People are now aware that alternative sources of energy can provide them electricity without being dependent on the grid. This in turn helped in increased rate of acceptability to get electricity from non-conventional sources of energy. Increase in efficiency of the solar systems, focus shifting towards restarting in-operational solar plants, implementation of mandatory power purchase obligations, and having supportive policies by the government have completely changed the face of the renewable energy segment.

Government support for RE sector
The government has wholeheartedly backed the renewable sector by announcing a target of 176 GW by 2022, of which 100 GW has been allotted to solar, 66 GW to wind and the remaining to the development of other renewable energy sources. The corporate, too, have shown interest to commit huge investments towards this goal. Besides this, enabling amendments have been proposed to the Electricity Act, including open access reforms and enhanced renewable purchase obligations.