CRISIL SME TRACKER: Testing times for small electrical equipment makers

It would be critical for MSMEs to raise their ability to compete efficiently in both domestic and export markets by adopting new technologies for improvement of quality and safety

Micro, small and medium enterprises (MSMEs), which make up about 85 per cent of the electrical components and equipment industry, are battling multiple headwinds today.

First, poor financial health has limited the ability of most state-owned power distribution companies (discoms) to undertake last-mile reforms — for improvement of quality of supply voltage, distribution loads, the billing process and prevention of pilferage. This has weakened demand for the MSMEs whose products find use in last-mile power distribution applications.

Between fiscals 2016 and 2018, while power transmission capacity logged a compound annual growth rate (CAGR) of 42 per cent to 390 thousands