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Industry criticises Indian government’s LED bulbs distribution scheme

Industry criticises Indian government’s LED bulbs distribution scheme

By BizLED Bureau

Feb 15, 2016: With the onset of the Union government, Prime Minister Narendra Modi had focused on energy conservation, and the government had undertaken the green environment drive  as a major factor to replace the existing incandescent bulbs with low-cost LED bulbs all over the country. However, the lighting industry has become critical of this program as, according to the manufacturers and retailers, the LED lighting market has got affected by this program.

LED bulbs distribution program criticised

This LED bulbs distribution program called the Domestic Efficient Lighting Program (DELP), has been a success for consumers. However, the manufacturers’ lobby has not welcomed the scheme owing to ‘rushed’ approach which has created an unbalanced situation in the market.

Industry criticises Indian government’s LED bulbs distribution scheme

The Indian government has distributed 60 million LED bulbs till February 10, 2016 at very subsidised rates, as per official reports, saving about 1.8 gigawatts of electricity.

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However, with huge savings aside, India’s program hasn’t escaped criticism as industry players are urging the government to get out of direct distribution. Even small manufacturers and distributors are taking the aim at government due to forced lower prices and segregated point for distribution. For example, a local retailer could earlier sell 50 LED lamps per week. After the government’s initiative, the sales are down to 20 LED lamps per week.

India is amongst the few countries where governments are replacing power consuming bulbs with efficient LED bulbs. China and Japan are other Asian countries following the suit.

Aim of DELP

The aim of the government program is to lower LED bulb prices, making it affordable for users and ensuring cut in electricity usage.

Under DELP, the government buys large volumes of LED lamps through competitive tenders from private manufacturers. This has led to LED prices to lower at Rs 64.41 from Rs 310 last year. This saving is passed to consumers, who pay close to Rs 130 for a single LED bulb.

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The government aims to save 20 gigawatts of electricity by 2018 by replacing incandescent bulbs with 770 million LED lamps. An estimated US$ 5.9 billion will be saved annually, once the distribution process is completed.

Government has formed Energy Efficiency Services Ltd (EESL) a state-run company, which will have complete authority and responsibility to sell LED bulbs at subsidized rates in local markets. EESL has set its target to doubling LED distribution to 110 million lamps in the next two months.

Manufacturers against govt tenders

Some leading LED lighting manufacturers decided not to participate in the government tenders because the process didn’t ensure attractive returns. The manufacturers didn’t want to give all their manufactured products to the government as they believe its just a one-time order. The industry believes that while the government is trying to meet its target, which may benefit the consumers as long as the scheme is on, but the government has not thought about the manufacturers and the ways to reduce manufacturing costs. The manufacturers question that while the scheme is on, the consumers may get LED bulbs in lower price, but will the lower price stay on even after the scheme closes? The manufacturers will not be able to sell their products at such lower price unless the government thinks about reducing the manufacturing costs as well

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