Bangalore, May 7: Power tariff hike in the State will erode the industry’s bottom lines, said the Bangalore Chamber of Industry and Commerce (BCIC).
M Lakshminarayan, president, BCIC, expressed concern over the Karnataka Electricity Regulatory Commission (KERC) approving a tariff hike of 25 paise per unit for industry and commercial consumption.
“Coming as it does at a period of flat industrial growth in the state it is untimely and will add to industry’s burden,” he added.
He further added that “The industry is already facing severe hardships due to unscheduled power cuts across the State and is struggling to manage its production and growth. The hike will only further aggravate the situation and will erode the bottomlines of the industry, which is already facing multiple challenges due to poor off take of inventories. The hike will ultimately result in increase in overall basket prices leading to higher inflation.”
Meanwhile, Assocham has welcomed the tariff order. Reacting to minor increase, J Crasta, Co-Chairman, Assocham Southern Regional Council, said that the nominal hike in tariff was inevitable and was not likely to place any undue burden on industries. At the same time, he hoped, the revised tariff would help improve financial situation of the State power utilities.
Regarding provision for regular increase in tariff through fuel cost adjustment mechanism, Crasta said that this was perhaps long overdue and would help utilities adjust their tariff in line with actual fuel cost. Thus, the quantum of annual increase in tariff would go down.
Crasta also called for immediate steps to improve power availability situation in the State. One of the major challenges before the new state government would be to improve the poor power availability situation that had started having an adverse impact on the industrial sector.
“The only solace for industry and commercial users is that KERC has not acceded to the original petition of ESCOMS seeking a tariff increase of 70 paise,” said Anuj Sharma, Chairman, Energy, Environment and Water Expert Committee, BCIC.
“Instead of increasing the tariff, it should offset its finances by ensuring efficient administration of ESCOMs to cut on administrative and distribution costs and also provide adequate infrastructure for their optimal functioning as well,” he added.
Karnataka Small Scale Industries Association (Kassia) president A Vijayendranath said “It is a dark day for the small and medium enterprise (SME) sector that the power tariff has been hiked by an average of 25 paisa, which happens to be the fifth increase in two and a half year period. The six lakh SME sector spread throughout the State supporting agriculture, large industries and exports are grievously hurt by this enhancement adding to a further concern of enforcement of periodical increase in fuel cost.”
FKCCI President, K Shiva Shanmugam, said FKCCI has a cautious approach towards the tariff order announced by KERC. Though not much to comment on the new tariff determination, we feel that we have to wait for the FSA (Fuel Surcharge Adjustment) application and consequences thereof.”