LED bulbs most potent example of govt-led change
Power minister Piyush Goyal’s Domestic Efficient Lighting Programme (DELP) is possibly the most effective government scheme in recent times, and in the shortest possible time-frame. DELP was launched by the Prime Minister on January 15 and, within a period of 9 months, 3.1 crore LED bulbs have been distributed by a public sector firm in six states, as a result of which 1,042 MW of peak power demand has been avoided, 9,064 tonnes of carbon dioxide emissions reduced every day (3.3 million tonnes a year) and consumers are saving Rs 4.4 crore every day (Rs 1,600 crore a year). Once the scheme is fully rolled out across 100 cities, it hopes to replace 77 crore regular light bulbs, by which time this would have resulted in a saving of 20,000 MW load—that’s around a tenth of India’s connected load—along with a reduction of around 80 million tonnes of carbon emissions each year; consumer savings, at that point, will be a whopping Rs 40,000 crore per year. Most important, as a result of the government launching such an ambitious scheme and the state governments buying into it, there has been a dramatic reduction in costs of LED bulbs from an unaffordable Rs 350 apiece last year to around Rs 75 today.
Another very good example of how the government is using its powers of bulk purchases to dramatically drive down costs is what’s happened to cement. When highways minister Nitin Gadkari first spoke of constructing concrete highways, most rubbished this as too expensive and, in fact, cement prices started rising in anticipation of the increased demand. The government, however, decided to create a portal for purchasing cement and, in the process, managed to convince producers that they would benefit by lowering prices. With poor offtake for cement and capacity utilisation at most plants low, a total of 37 cement manufacturers have committed to selling the government 9.5 million tonnes at a price of Rs 120-140 per bag as compared to Rs 300 or so at the time Gadkari first announced the construction of concrete roads. The same exercise is now being replicated for steel. These schemes clearly show that when the government wants, it can play the role of a catalyst in promoting and pushing necessary changes quickly.