Withdraw Price Distorting LED Bulb Distribution Scheme: Industry to Government

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The LED industry has asked the government to withdraw its bulbs distribution scheme, alleging it is resulting in price distortion and discouraging retailers from selling the lamps.

However, state-run Energy Efficient Service Ltd (EESL), nodal agency for the distribution programme, rubbished the allegation, with its managing director Saurabh Kumar saying data shows that the scheme is helping the industry grow at a rapid scale.

EESL’s Unnat Jyoti by Affordable Lamps for All (Ujala) scheme played an important role in driving conversion from older technology bulbs (CFL or incandescent lamps) to LED. Large procurement volumes provided the critical mass the industry needed to ramp up local manufacturing of LED lamps and reduce costs, said Harshavardhan Chitale, vice-chairman, Philips Lighting India. “This way the government played a very supportive role in building demand and we in the lighting industry are very appreciative,” Chitale said.

“However, we hear many retailers and distributors complain that continued government role in distribution of these lamps to consumers is impeding further growth of LED lamp adoption as many electrical retailers are shying away from carrying LED lamps because they see government distribution as a potentially big threat to their livelihood.”

Kumar said the industry perception runs contrary to facts. “There has been a 400% growth in LED sales by industry in the last two years because of the Ujala scheme.

Last year, the industry sold 6 crore LED bulbs and this year it is expected to close at 25 crore,” he said. EESL is committed to its target of selling 77 crore LED bulbs, likely to be achieved by 2018, a year ahead of schedule, he said. Havells president Sunil Sikka said Ujala programme has helped the industry scale a peak in less than two years.

“However, the ecosystem is different when you sell through distributors. It’s time they let market dynamics take place and distributors and retailers take charge.”

Source: March 23, 2017. Withdraw Price Distorting LED Bulb Distribution Scheme: Industry to Government