Industry flays state power sop

Jayant Bhuyan of CII said that 20 per cent of MSEB’s consumers accounts for 70 per cent of its revenue and it was this section of consumers which was repeatedly being pressed with increased tariff in a bid to enhance MSEB’s revenue. MSEB was not efficiently working and it needs to take corrective steps to reduce thefts and transmission losses.

Indian Merchants Chamber (IMC) president YP Trivedi said that the write-off was not properas it will further ail MSEB. MSEB should first try to recover the long-pending arrears and only in exceptional cases should it resort to this extreme remedy of waiver, he said.

Trivedi said that the write-off will put an additional burden on the industrial and commercial consumers and make the power supplied to these consumers costlier. "The power hike, if done, will be one of the highest in the country as a result of which the industry will move out of Maharashtra,” he said.

Trivedi said that the only remedy was to privatise at least the transmission to avoid the losses and theft of electricity.

All India Association of Industries (AIAI) president Vijay Kalantri said waiver of power bills to farmers as well as writing off their debts will further add to the losses of state and the central government which already suffer from financial crunch for development profits. He added in view of privatisation in the power sector and to further encourage them, such waiver will work against this programme. "Anyfurther reduction in power tariff to the farmer will add to the burden on the industry and the commercial organisation which will make them incompetitive in the international world as our power cost is higher than other countries," Kalantri said. The recent tariff hike of 11.2 per cent and the earlier hike by the state government clearly shows the subsidies have compelled them to do this, as well as the recent cancellation of World Bank loans is also because of this very reason.He said the government should reduce such power subsidies and cut down on transmission losses rather than adopting a soft option to increase power tariff.

Small Scale Industries Association president Madhu Khambete has strongly opposed the proposed waiver. He said the association, which has challenged the power tariff hike made effective in 1996 in the Thane district court, will take up the issue on the streets.

Khambete said that of the total five lakh small-scale units in the state, the majority of them have been hit severely dueto recession while at least 40 per cent have been working under capacity. The hike will compel closure of a large number of such units, he added.

MSEB will be thrown into a serious financial crisis if the directives of Thackeray are implemented. MSEB will need a staggering Rs 1,000 crore from the government if it has to continue subsidising the agriculture sector and if this option does not work, domestic, industrial and commerical customers will pay to bear a steep hike in electricity charges.

Current estimates indicate that to support 22 lakh agricultural consumers, these three users may even need to fork out at least Re 1 extra for each unit presently consumed. This would make Maharashtra the most expensive state for buying electricity. To quote a report of the Comptroller and Auditor General: "…the current high tension industrial tariff in Maharashtra is already one of the highest if not the highest in the country.

Further steep increase in this tariff will encourage industry to go in forcaptive power generation. This will substantially reduce the scope for cross subsidisation and will have serious long term implications for the financial viability of the MSEB."