1. Cover Story LIGHTING LEADERSHIP | POLICY
SEL28 November-December 2015
Right Man in
the Right Place
hen Kerala State Electronic Development Corporation Limited
was unable to register profits and was struggling to pay
salaries to its employees besides its statutory dues owing to
lack of working capital and frozen bank accounts, Dr Ajay
Kumar, an IAS officer of the 1985 Kerala cadre was tasked to turn it around.
During his stint as managing director, from 2000 to 2003, he managed to turn
the mammoth public sector enterprise into a profit making organisation, from
a state where the company’s net worth had eroded ten times over! Twelve years
down the line, the company remains on the path of profit and has become a tale
of one of the most successful restructuring public sector exercises in Kerala.
Enthused with his own business skills, sharpened at KELTRON and through
prior experiences of installing the country’s first electronics exchange as a
young engineer at Uptron Digital Systems Limited, the Kanpur electrical and
electronics IITian decided to broaden his worldview of business and leadership.
In 2004 he signed up for a master’s degree in Applied Economics and followed
it up with a PhD in business administration, specialising in information systems,
from University of Minnesota. Here too he achieved a distinction, of completing
by 2007 the fastest doctoral programme in a business school of the university.
Kumar had not imagined that his pursuit for mid-career interdisciplinary
knowledge would propel him into the hot seat of a 21st century government
department, which would be responsible for shaping policies for developing an
information society and countering the profound challenge of climate change.
But since 2010, when he was appointed Additional Secretary, Department of
Electronics & Information Technology (DeitY) at the Ministry of Communication
& IT, Kumar has emerged as an enabler for evolving an eco-system of domestic
manufacturing of electronics – the heart and soul of LED lighting - that can
potentially reduce light-related energy consumption from 18% to 13% in the
country by 2019.
Kumar agreed for an early morning interview at his tastefully done office at
the imposing CGO Complex in New Delhi and spoke candidly about a range of
initiatives that he has helmed. Here are edited excerpts of that interaction…
Mrinmoy Bhattacharjee
W
33November-December 2015 29SEL

2. Cover Story
Howhasthemanufacturinglandscape
changedinthecountrysinceyoutook
chargeatDeitYfiveyearsago?
IcanrecallthatafewDiwalisagoshiploads
of LEDlights,primarilyfromChina,used
todockatourshorestomeetlighting
requirementsforthecelebration.Wehad
decidedthatitwasnotagoodsituationto
bein,owingtotheinfluxof substandard
products.Thegovernmenthadalso
decidedtopromotethemanufacturing
ecosysteminElectronicSystemDesign
andManufacturing(ESDM).Wehadagreed
thatif thechipcouldnotbemanufactured
indigenouslyatpresent,atleasttheassembly
andthelatterpartof thevaluechaincouldbe
doneinIndia.So,wecameoutwithseveral
policyinitiativestomakeLEDmanufacturing
moreattractiveinthecountry.
Thisincludedprovidingincentivesfor
investmentinLED manufacturingunder
theModifiedSpecialIncentivePackage
Scheme(M-SIPs).Theschemeisavailable
forbothnewandexpansionprojects.It
providessubsidyforinvestmentincapital
expenditureof 20%forSEZsand25%
innon-SEZs.Theschemealsoprovides
reimbursementofCVD/Exciseforcapital
equipmentforthenon-SEZ units.Forhigh
technologyandhighcapitalinvestment
unitssuchasfabs,reimbursementof
centraltaxesanddutiesisalsoprovided.
Theincentivesareavailableforinvestments
madeinaprojectwithinaperiodof 10years
fromthedateof approvalforunitsallacross
thevaluechain,startingfromrawmaterials
includingassembly,testing,packagingand
accessoriesandcovering29verticalsof
ESDM.Withthisschemewehavebeenable
tooffsetdisabilityandattractdomesticand
globalinvestmentsintotheESDM sectorin
thecountry.
Thegovernmenthasalsorolledoutthe
ElectronicManufacturingCluster(EMC)
schemethatsupportscreationof world
classinfrastructuretoattractinvestments
intheESDM sector.TheEMC scheme
supportsgrantof assistanceforsettingup
of bothgreenfieldandbrownfieldclusters.
Financialassistanceundertheschemeisin
theformof grant-in-aidonly.Forgreenfield
EMCstheassistanceis50%of theproject
costsubjecttoaceilingof `50crorefor
every100acresof land.Andforbrownfield
EMCs,theassistanceisupto75%of the
projectcostsubjecttoaceilingof `50
crore.WehavebeenabletoconvinceIndian
manufacturerstocomebacktothecountry;
theenvironmenthaschangedsignificantly
inthelastthreeyears.
Ithasbeenayearsincethegovernment
launchedthe‘MakeinIndia’programme.Is
thelionroaring?
Sincethelaunchof ‘MakeinIndia’,and
also‘DigitalIndia’,thelevelof interest
inelectronicsmanufacturinghasrisen
dramatically.About120companiesin
differentsectorsof electronicshavecome
forwardandinvestedamountsexceeding
`1.20lakhcroreforthenextfivetosixyears
inIndia.Thegoodpartof thestoryisthese
investmentshavebeenmadebyMNCsas
wellashomegrowncompanies.Someof
themajorMNCsthathaveinvestedare
Foxconn,GE,Schneider,Samsung,Bosch,
Continental,Flextronics,besidesothers.
Inthelastthreetosixmonths,almost
allmobilemanufacturershaveshifted
theirbasefromChinaandelsewhereto
setupinIndia.Andaswespeak,mobile
manufacturingbydifferentcompaniesis
goingoninover15locationsinthecountry.
Duringthisperiod,over17,000jobshave
beencreatedandanadditional10,000jobs
areprojectedtobecreatedinthemobile
manufacturingsectoralonebyMarch2016.
Atpresent,thecountryhas20new
electronicsmanufacturingclustersin
differentstagesof development.At
least8-10stategovernmentshavecome
outwithpoliciestopromoteelectronics
manufacturingintheirstates.Thisshowsa
healthycompetitionamongthestatesfor
attractinginvestment.Iwouldbesurprised
if anyelectronicsmajorwhichislooking
forgrowthcanaffordtoignoreIndiaasa
destination.Sointhatsense,Icansaythat
thelionisreadytoroar.
Focusonhighvalue-addedmanufacturing
suchasdesign,components,EMSand
testingareimperativeforIndiatobeable
toemergeasaglobalelectronicspower.
Whatstepsareyoutakinginthisrespect?
Weareambitiouslytargetingacorearea
whichistermedasLargeAreaFlexible
Electronics.Thegovernmenthasset
upCentreof ExcellenceforLargeArea
FlexibleElectronics(CFlexE)atIIT Kanpur
withaninvestmentof `132.99crore,to
bepumpedinoverthenextfiveyears.The
centrewillworkinnon-ITsectorsincluding
Energy,Environment,Health,Defence
&Security,Communication&Transport,
andEducation.Ithasbeenmandatedto
developtechnologyprototypesinPPP
modethroughindustrycollaborations
onOLED lighting,flexiblesolarmodule,
circuitlabonpaper,flexibletemperature
sensor,conductiveinks,printableelectronic
tags,andanti-counterfeitingformedicine
packages.Severalcompaniesengagedin
OLED havebegunworkingcloselywith
CFlexE.
Typicallyhighvalueelectronicfoundries
churningoutmillionsof ICshavebeenthe
keydriversof theelectronicindustry.In
therecentpastawholenewmaterialand
manufacturingparadigmbasedonlarge
areaprocessinghasevolved,leadingto
manufacturingof anumberof products
withnovelapplications.Theseprocesses
aretypicallyhighthroughput,largevolume
andlowcost,whichallowelectronicsto
bedirectlyintegratedontoavarietyof
substrates.Inshort,thisismonolithic
integrationof electronicscomponentson
flexiblesubstratesuchasplastic,paper,
rubber,steel,clothetc.,asperrealworld
needs.Thisinitiativewillboostdesignand
manufacturingof electronicsinIndia.We
arealsotoyingwiththeideaof attracting
LED fabtobeabletoproduceLED chipsin
thecountry.
Humanresourcedevelopmentisstrategic
totheelectronicssector.Howisthe‘Skill
India’initiativepercolatingtotheground
level?
DeitYhasbroughtoutaschemeforscaling
upthenumberof PhDsinelectronics
andIT.Wewillsupport3,000additional
PhDswith1,500eachinESDM andIT/
ITES atanestimatedcostof ` 401crore.
Outof 1,500additionalPhDsinESDM,
500wouldbefulltimeand1,000wouldbe
SEL30 November-December 2015
LIGHTING LEADERSHIP | POLICY
parttime.Inaddition,100fulltimePhDs
aretobesupportedbyindustryorstate
governments.Thesescholarshipsare25%
higherthanUGC fellowshipratesandwill
covernationalandinternationalconference
participationfees,universityfee,labfee
andadministrationexpenses.Withinthis
frameworkwehavecomeupwithanew
formulationwhereinDeitYisinvitingthe
industrytochoosetopicsof theirinterest,
tobepursuedatanyinstitutionof higher
learningsuchasIITs.Thefundingforsuch
programmeswillbesharedbytheindustry,
theinstitutionandDeitY.
UndertheSkillDevelopment
Programme,weofferspecialisedskillsets
toLED manufacturersatourcost.The
manufacturerscansendtheirworkforceor
potentialemployeestoElectronicsSector
SkillCouncilof India(ESSCI)accredited
centres,tobetrainedonthecouncil’s
recognisedcourses.TheGovernmentof
Indiaprovides75%of thetrainingfeeas
assistanceforthecourses.Theschemealso
providesfor100%feereimbursementto
40%of theseatsthatwouldbereserved
forcandidatesbelongingtoSC/ST/
economicallyweakersections.
DeitYwasformedwiththeprimaryaimof
fosteringR&Dactivityinthesector.What
initiativesareyoutakingtostrengthen
researchanddevelopment,considering
thatthecountryhasbeenwitnessinga
spurtoftechstartupsinrecentyears?
Israeltalksof creating5,000startupsayear.
Ourendeavouristounleashtheenergy
of 125crorecreativeminds.Imaginehow
manystartupswecouldfloatinthecountry!
WehavesetuptheElectronicDevelopment
Fund(EDF),whichisoneof thekey
strategiesforcreatingavibrantecosystem
of innovationandR&D withactiveindustry
involvement.This‘Fundof Funds’will
participateinprofessionallymanaged
‘DaughterFunds’,whichinturnwillprovide
riskcapitaltocompaniesdevelopingnew
technologiesintheareaof electronics,
nano-electronicsandIT.
TheEDF willalsohelpattractventure
funds,angelfundsandseedfundstowards
R&D andinnovationinthespecified
areas.Itwillhelpcreateabatteryof
‘DaughterFunds’andfundmanagerswill
beseekinggoodstartupsthatcouldbe
potentialwinnersbasedonprofessional
considerations.Thisisalandmarkstepas
wedonotwantthegovernmenttodecide
whichcompanytofund,otherwisebiases
couldcreepin.Wehaverecentlyidentified
andapprovedCANBANK VentureCapital
FundsLtd(CVCFL)asthefundmanager
forEDF.Thefundmanagerwillconsider
requestsfromapplicantventurefunds,
angelfundsandseedfundsandmake
recommendationstoDeitY.TheCVCFL
willalsobeparticipatingintheindividual
beneficiaryDaughterFundsbasedonour
approval.
AnyDaughterFundwhichisregistered
inIndiaandabidesbyrelevantrulesand
regulationsapplicabletosuchfunds,
includingSEBI regulationsonventure
funds,andissetuptoachievetheobjectives
willbeeligibleforsupportfromtheEDF.
Therequestsforseekingparticipationby
EDF mustbemadeonorbefore31stMarch
2017.Wehavereceivedatremendous
responseandareconfidentthatthis
initiativewillhelpthesocietyatlargeandnot
justgovernmentlabsanduniversities.Itwill
alsobenefitlightingfirms.
DeitYhasnotifiedCompulsoryRegistration
Scheme(CRS)todevelopandmandate
standardsforLED.Howisthispolicy
impactingthestakeholders?
Muchof theimportedLED lightswere
cheapandof inferiorquality,which
couldalsocausepermanentlossof sight.
WenotifiedLED lightsformandatory
compliancesafetystandards,orCRS.
HenceforththeproductssoldinIndia,
importedormanufactured,willhaveto
complywithCRS.Domesticmanufacturers
arehappybecausetheywerecomplying
withthesestandardspriortoCRS,butmuch
of theimportsdidnot.Ourestimateisthat
nearly30%LED lightsthatwereimported
beforeCRS cameintoeffectwerenot
complyingwithsafetyrequirements.Sonow
anewmarkethasemerged,tobecateredby
compliantandbetterqualityproductsby
localmanufacturersaswellasimporters.
How are you ensuring that the
domestic industry will be able to tap
the emerging market created by the
national programme for converting all
conventional streetlights to smart and
energy-efficient LEDs, and the Domestic
Efficient Lighting Programme (DELP) in
100 cities?
Energy Efficiency Services Limited
(EESL) is doing a wonderful job in
driving major LED light procurement for
street lighting, government buildings and
railways, besides encouraging consumers
to buy LED bulbs at a subsided rate. Most
of this demand could have been met by
imports. To ensure that this local demand
is met by domestic manufacturers, we
have notified LED lights under the
Preference for Domestically Manufactured
Electronic Goods (PMA) in government
procurement, and made it applicable to
all ministries and departments except
the Ministry of Defence. PMA would
also apply to procurement of electronic
products made under all centrally
sponsored schemes and grants by the
Union Government.
What will be the far-reaching impact of
these policies on job creation and the
domestic economy at large?
IT and electronics sectors will be the
largest job creators in country. They will
constitute 25%, or about $1.25 trillion of
an expected GDP of $4-5 trillion by 2022-
25. The ICT sector will remain the biggest
driver of change for the next two to three
decades, owing to technology-driven
transformation of society on the back of
the ‘Digital India’ initiative.
What challenges do you foresee on the
path of your ambitious programmes, and
how will you overcome them?
I think there is a need for change
management in the society in general
and government in particular. We have to
carefully manoeuver and manage people
when society moves from the physical to
more technology-driven processes. We
need to train and empower people to
ensure that we do not end up creating a
digital divide. n
33November-December 2015 31SEL