A silver lining

A silver lining

The agenda proposed by the new
Governor of Reserve Bank of India
Raghuram Rajan
drew a 'thumbs up' resulting in prices of stocks moving in positive territory and the value of the rupee contracts. India Inc has been waiting for strong measures to be taken in order to strengthen, restore and improve confidence in the Indian economy; and the move to enhance limit for exporters to re-book cancelled forward exchange contracts and a special concessional window to swap foreign currency non-resident (FCNR) deposits are viewed to help appreciate the rupee. Also, the measures to deepen securities markets, improve financial inclusion for SMEs, and a disguised warning for corporate defaulters of loans, and of course, appointment of a panel of experts in next three months on what needs to be done to strengthen the monetary policy framework, need to be appreciated. Even though some quarters are still skeptical on the efficacy of the reversal of monetary policy stance, and vouch for the need of out-of-the-box models to cushion the global market spill over, there is no denying the fact that a sense of urgency and clear direction seems to have its positive impact on the markets. Yes, these are short term measures, and we need to go miles before we sleep.

Deeply stressed as the economy is, with the plummeting value of currency, spiraling fuel costs and the resultant high cost of thermal power generation; pressing need for quality coal and its availability, availability of quality raw materials like limestone, the Indian cement industry is also passing through turbulent times. To cap it all, then, there is the increased pressure of complying with mandatory energy regulations such as Perform, Achieve, Trade (PAT), where a manufacturer must meet energy reduction targets as well as its renewable energy purchase (RPO) obligations.

The cement industry has taken these challenges as growth opportunities to make manufacturing units as green and self-sustainable as possible in terms of power. Thanks to its tireless efforts, the cement industry with an installed capacity of over 250 MT, is probably the most efficient in the world, and has a well-deserved reputation for technology interventions. Most plants have thermal and electrical specific energy consumption comparable to the best in the industry; have state-of-the-art technology, and energy efficient equipment; and there is ample focus on the plant layout design which also contributes to energy savings. There is still scope for reduction in both thermal and electrical energy consumption, for example, use of alternate fuels and raw materials (AFR) is a major potential area for improvement. Present thermal substitution rate (TSR) by use of AFR is in the range of 0.5 to 1 per cent whereas developed countries achieved as high as 40 per cent TSR. But as per the views, the industry is slowly but steadily gearing up to meet challenges.

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