KOLKATA: International Copper Association India (ICA India) is pinning its hopes on a revival in copper demand led by a boost to key segments within infrastructure sector -- power and real estate in the forthcoming budget this year.
"This will be the first full budget which the current government will be tabling.
Expectations are high and the industry is looking for a revival which will kick start economic activity. In the infrastructure sector, power and real estate consume the highest amount of copper. This comes in the form of power equipment which includes transformers and wire & cables and housing construction," Sanjeev Ranjan, managing director, International Copper Association India (ICA India) said. ICA India is a member of Copper Alliance and the Indian arm of the International Copper Association, a leading not-for-profit organization for the promotion of copper worldwide.
With government planning to add 88,000 MW of generation capacity during XII year plan by 2017, an estimated Rs 70,000 crore will be needed to expand transmission & distribution (T&D) network for and estimated annual growth of 20% in transmission capacity. "This is going to be a big driver for transformer industry as we expect demand will not only come from fresh power addition but also from replacement of old distribution transformers," he said. "Nearly 40-50% of the distribution transformers are in need to be replaced if we wish to cut down on out T&D losses estimated to be around 3-8 %," he added. It's estimated that for each 1 MW additional power generation capacity, about 7 MVA transformer capacity is required. "The transformer market is our largest market for copper in India and has an estimated manufacturing capacity of over ~300 to 350GVA which is 140% more than the 250GVA transformation capacity anticipated to be added by end of XIIth Plan," Mr Ranjan said.
Another sector which needs urgent attention is real estate where the government needs to focus on affordable housing, Mr Ranjan said. With a 2.8% rate of urbanisation it is expected some 500 million people will be staying in large and small urban centres by 2020. Lower interest rates and spending by government on its own or through PPP model is needed. The ICA India official also said GST is going to have major bearing on future growth by making the system more transparent and plugging leakages in revenue collection, while free movement of goods across the country will be really beneficial to drive the 'Make in India' theme.