“RBI should Ease Monetary Policy” [June 2012]

June 19, 2012 11:25 am

Monetary easing by RBI can release the much needed liquidity hopefully at an affordable cost- Ajay Das, MD, Timken India
Bearing industry gets challengingThe Indian bearing industry is set to witness a increased demand especially in large size bearings. With consumers getting more demanding and product liability and safety issues becoming more stringent, there would be a need for a qualitative leap in the performance of the bearings. Meeting these two requirements in a competitive fashion is the key challenge for the bearings industry.
The increasing trend of designing and manufacturing of heavy industrial equipments in India has resulted in customers asking for design and application engineering knowledge and assistance. “In many applications, bearings are the limiting factor in increasing the power density of the equipment and also one of the first components to get damaged. Hence working with customers, to help them make optimum design choices is an important customer expectation now”, said Ajay Das, MD, Timken India.
Innovative possibilitiesBearings demand is a derived demand and is a function of what local industry needs for the equipments manufactured in India. With increasing manufacturing of heavy equipments to support infrastructure build and energy and construction equipments, the large bore bearings technology for critical application is coming to India. For example, Timken, a global leader in friction management technologies manufactures bearings for Metro rail coaches and high speed coaches at its factory in Jamshedpur which is otherwise imported and is localising a lot of large size bearings for critical locomotive and off highway application at its factory in Chennai. 
Traditionally while most of the bearings company focus on how to make acceptable performance bearings at a competitive cost, Timken has taken a different approach. Emphasising on this approach, Mr. Das said, “At our technology centres, Timken has invested heavily into analysing and understanding the interaction between bearings and its supporting and surrounding components to help customers develop a better overall power train system versus what is available today. This allows us to optimise the system for better overall performance at optimum cost and this sets us apart from competition”.Very often, in designing compact and efficient power trains, bearings become a limiting factor from capacity and life expectancy point of view. Innovation is the key to push the boundaries on bearings and power train system designs so that the world can witness higher performance equipments at lower costs.
Altering TrendsThe increasing development in Indian infrastructure and modernising of the industry has opened up tremendous opportunities in the bearings industry. The slowdown in the economy and demand apart, the industry has had to face increased production cost due to the rise in price of inputs especially steel. Similarly, the industry has had to face cost-competitiveness due to higher import duties on raw materials (steel tubes, steel bars, grinding wheels, etc). Finally customers are demanding more competitiveness and responsiveness from bearing industry, which would require companies to regionalise production bases closer to customers.
The Indian bearing industry is in the process of evolving since the time of industrial revolution. The Indian economy which is driven largely by the domestic demand was not only spared of the worst of the downturn but is now placed very well to make the most of the upturn. Most of the companies have used the downturn to make themselves lean and although it has been a somewhat painful process, the future looks more promising. According to Mr. Das, “While the Indian consumers maintained their spending even in the downturn, the capital investments were put on hold by many companies. This impacted the industrial segments. As the government increases its thrust on the infrastructure build, the economic growth will accelerate”.
“As we move forward customers will look for better and cleaner technologies and more value added services (like maintenance of equipment, reliability monitoring, remanufacturing) that keeps their equipment running longer and more efficiently. Companies should be in an excellent position to provide their discerning customers with the best in industry end to end solutions (design to aftermarket services)”, Mr. Das adds.
Education to make an impact Though the manufacturing sector sees a sluggish growth presently, the next 10 years looks optimistic because of globalisation of products and services and optimisation of quality standards in this segment.  In the past, manufacturing sector has provided jobs to those who did not have the benefit of more advanced education, and in emerging economies, this is still true. Focusing on this aspect, Mr. Das said, “In a country like ours, where 100 per cent literacy is still a farfetched dream, manufacturing still remains the bread and butter to the less skilled and has been generating employment opportunities to this segment and this shall be the case in the next few years too”.
The growth in the manufacturing sector for the year 2012 has been modest; improved client demand and good quality products have led to a further increase in new business for the Indian manufacturers during April this year. Moreover, the rate of expansion has been considerable. Growth in new export orders also has quickened during the month.
Commenting on the Government’s approach in boosting the sector, Mr. Das said, “Efforts to provide better access to finance for infrastructure companies and selective easing of import duties on inputs for the infrastructure industries are welcome steps. On the other hand the increase in excise duty is certainly going to negatively impact the cost and demand”.
However, he recommends, “Further monetary easing by RBI can release the much needed liquidity hopefully at an affordable cost.  The Government is going to implement a short-term manufacturing plan to create jobs quickly to prevent social unrest after pitching the new manufacturing policy (NMP) as an immediate fix to restore the manufacturing sector and create jobs by the millions”.