AP industry upset after power tariff hike proposal
A recent proposal to hike power tariffs by 35% has left industry shocked in Andhra Pradesh. Industry representatives say Andhra Pradesh may end up losing investments to other states like Gujarat and Chattisghar, Reports CNBC-TV18‘s Appaji Reddem and Animesh Das.
January 16, 2013 / 08:35 IST
A recent proposal to hike power tariffs by 35% has left industry shocked in Andhra Pradesh. Industry representatives say Andhra Pradesh may end up losing investments to other states like Gujarat and Chattisghar, Reports CNBC-TV18’s Appaji Reddem and Animesh Das.
If 72 hour long power cuts every week for the past 16 months weren't enough to plunge most industrial units in AP into dark days, the latest proposal to hike power tariffs in the state by 35%, amounting to a 250% hike in three years sure will.Also read: CIL to discuss coal supply to power plants via MoU routeDevendra Surana, President, FAPCCI, Hyderabad say’s, "in August 2010, our average tariff was Rs 3 per unit. The average tariff after proposal by Aperc is going to be Rs 7.59 per unit. That means a 250% jump in less than 3 years and that means it has been irrational and disproportional." In fact according to the federation of AP chamber of commerce and industry many industries in AP are struggling to survive. Such a move will either shut them down or force them out."There is a huge number of industrialists currently in AP. They are setting up second plant outside it, whether it is Chattisgarh, Gujarat, Maharashtra or Madhya Pradesh or further north. Lots of them are setting up their second base outside AP. Predominantly because of these power situation", says Surana Industry also alleges the state govt is trying to pass on the burden of subsidies granted to the agricultural sector to industry.He also says, "More than Rs 15,000 crore worth of free power is going to be supplied to agriculture. The question is who's going to pay for it. The AP govt promised to pay a subsidy of Rs 5,800 crore. That means Rs 10,000 crore tax. An indirect tax is put on industry."At its end, the government says the hike was inevitable. N Kiran Kumar Reddy, Chief Minister, Andhra Pradesh says, "Electricity charges have not been increased. It is fuel sur-charge which is increased. That is the only expenditure increased by the department. Extra expenditure which the department incurs is passed on to the consumer as per his usage. One cannot avoid it."For now, it's going to be a real challenge for Kiran Kumar Reddy government to balance the health of both agriculture and the industry.
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