Driven by an ambitious ‘Power for All’ by 2019 target, the Government has been doing everything to boost electricity output, including solar power generation and the promotion of energy-efficient lighting systems such as LED lighting. As per the ‘2016 Indian Lighting Market Report’ by LED inside, the country’s LED lighting market was projected to expand by 47.1 percent year on year (YoY) by end-2016, reaching $ 1.14 billion.
Based on the government’s push for ‘Make in India’, one expects some fiscal and policy incentives in the upcoming Union budget 2017-18. This will help in creating a somewhat level-playing field for domestic lighting manufacturers to take on global giants, particularly companies from China enjoying immense state support. Similar support from the Indian Government is essential to curb the reliance on foreign components and products to achieve consistent quality and cost effectiveness. But short-term challenges may still remain due to the paucity of experienced local suppliers and effective midstream and upstream LED chain.
Incentivising LED Lighting manufacturing in India is imperative. This will help the country meet its power needs faster and ensure it is done with lower environmental pollution since LED Lights unlike CFLs have long life and not beset with high toxicity issues that plague CFLs. In fact, CFL/lighting manufacturers should be incentivised in switching over to LED lighting. Being more long-lasting than CFLs and other lights, all-round gains will accrue for various stakeholders, including consumers. Buoyed by falling interest rates, our Government could announce concessional interest rates for manufacturers and promoters of LED lighting projects.
Incentives for LED lighting manufacturing will boost the Smart Cities initiative too since LEDs comprise of an integral part of this programme. This is also a good time for the Government to initiate more simplified policy regulations that promote ease of doing business. In this connection, for diverse documentation and approvals, the Government should encourage self-certification particularly for non-critical safety or legal requirements. This will save time and resources, especially in the case of start-ups and SSI units.
The Government may even consider establishing a number of SEZs (Special Economic Zones) for the LED lighting industry, which could pay long-term dividends both for the industry and the nation. Such SEZs can also accommodate central and joint Government testing and certification stations for collective and uniform test certifications. But land in such SEZs should only be allocated to those entrepreneurs who have serious plans for setting up business in order to avoid some of the past mistakes in developing such SEZs. For companies that begin production in such zones, the Government could announce excise exemptions also. The original period of concessions for some SEZs which are running satisfactorily have expired or is expiring shortly. This sanctioned period limitation for such SEZs may be further extended by 5-10 years, as per the new norms.
Meanwhile, the Centre and States have already set the ball rolling to work in tandem to ensure the July rollout date for GST is met. This single tax reform could bring immense benefits for the industry and the economy in the long term by levying uniform tax rates across categories and subsuming unwanted taxes, thereby lowering the cost of production and consequent, the price of the products for consumers.
Additional funds should also be allocated to run awareness campaigns for consumers of LED Lights to advocate faster adoption and usage of LED Lights in social and national interests, given the numerous environmental and other cost and long life advantages to the consumers and the Nation over other forms of lighting. Such focussed measures will also benefit programmes such as ‘Power for All’ and the Smart Cities’ mission.
