India Inc lost Rs 43, 205 Cr in power downturn

NEW DELHI, INDIA: India Inc's downtime losses have doubled since 2003 and today the loss stands close to  one per cent of India’s GDP. Downtime losses, across all verticals has averaged to Rs 54,434 per hour, with highest in telecom and real estate or infrastructure companies, lowest in the SMEs. Major impact of downtime is employee productivity and customer management.

This is what Manufacturers’ Association for Information Technology (MAIT) the apex body representing the IT hardware industry in India and Emerson Network Power (India), find out in their joint study with consulting firm Feedback Business Consulting Services Pvt. Ltd on 'Network Power Downtime'.

This analysis of the impact of downtime in corporate India due to high occurrence of power outages, scheduled as well as non-scheduled, revealed that India Inc lost Rs. 43, 205 crores in 2008-09. The amount of such direct losses have almost doubled since 2003 when these amounted to Rs. 22,000 crore.

According to this study, Infrastructure stress on power utilities came up as a key reason for downtime.        Companies, without alternative sources of power, were highly depended on the grid. Mumbai continues to be most depended on grid for power.       

As per the findings, 78 per cent respondents feel that power scenario will improve only after a year; confidence being lowest in Delhi and Pune, high in Chennai. Contingency planning figures already a part of the Indian business psyche with over 95 per cent firms having a power source other than grid supply.

Vinnie Mehta, Executive Director, MAIT said in a release, “Contingency planning is part of the India Inc. mindset, based on traditional experiences with infrastructure limitations. This trend will continue in the light of global power failures encountered in Western countries. Firms will need to pay more attention to maximizing uptime if they are to remain competitive in a globally networked economy.”

With significant companies relying on IT infrastructure for automation, productivity and business management; it surfaced that employee productivity and customer management were severely impacted by such downtime. Among the various verticals studied, the manufacturing sector was the most adversely impacted.

As Sandeep Nair, MD, Emerson Network Power (India) Pvt Ltd said, “In India, while the metros are still grappling with the challenge of inadequate power supply, the interiors reflect a grave picture. The problem is further compounded by unclean power and other basic constraints like earthing, cabling and lack of a viable infrastructure. This has necessitated deployment of Business Critical Continuity solutions for growing businesses.”

Nearly 62 per cent of the firms polled were extremely dependent upon IT & Automation. Power disruption frequency highest in Delhi followed by Pune and Bangalore. The average speed of restoration has come as over 70 minutes, Bangalore most affected with high frequency and longer outages. In Hyderabad outages are infrequent but long.

In a sector-wise assessment, Telecom segment had the fastest restoration, while it was slowest in pharma/biotech, hotels/hospitals and manufacturing.