Hike in Tata, BSES power rates likely as State ups sales tax

Significantly, the new decision will not be applicable to those companies, which supply power to the Maharashtra State Electricity Board. As a result, the Dabhol Power Company, a subsidiary of the Enron Power Corporation, will not be required to pay the additional levy.

Following the introduction of the new levy, the Vilasrao Deshmukh government will garner at least Rs 116 crore, to be utilised mainly for improvement in the transmission as well as distribution system. “At least the bill states that the funds to collected will be used exclusively for strengthening the MSEB, but we are not sure about the intention of the government. Owing to resource crunch, the funds will be utilised for developmental works also,” the official added.

In fact, the Electricity Act, 1963, provides for levy of sales tax. However, the provision was not invoked for obvious political reasons. Now since the government is passing through unprecedented resource crunch, it amended the law to provide for levy of additional sales tax, the official pointed out.

Ever since the Congress-led Democratic Front assumed power in October 1999, it has been concentrating on improving the financial situation. As a first step, it presented a white paper on economy and subsequently, declared a series of measures to gear up revenue recovery. However, so far, the steps taken by the government have not yielded desired results.

“In the absence of concrete decisions, our resource mobilisation plan has failed to deliver the results. In addition, our financial position was also adversely affected when there was a cut of Rs 650 crore from the Centre. The result was that the deficit, which stood at Rs 750 crore at the beginning of the year, will touch an all time high of Rs 3,900 crore at the end of the current financial year,” the official added.

The official said while all the departments have been asked to take immediate steps to cut the non-planned expenditure by 20 per cent and planned expenditure by 15 per cent, official orders will be issued immediately after the on-going winter session of the state legislature.

“We will be able to meet our plan target only if we impose the plan size at least by 15 per cent and that too in the current month itself,” the official pointed out.