The state government has extended the power tariff subsidy after local industrialists urged Chief Minister Devendra Fadnavis to save them from a tariff shock. The tariff for December will continue to be at October level. MSEDCL will get INR 7.06 billion as compensation. The state government will pay INR 6.06 billion, Mahagenco INR 0.50 billion, Mahatransco the remaining INR 0.50 billion. All category of consumers will benefit from subsidy.
A meeting was held between CM Fadnavis, Finance Minister Sudhir Mungantiwar and Energy Minister Chandrashekar Bawankule late on Tuesday night and representatives of local industrial associations. The industrialists told the ministers that if the subsidy was withdrawn then continuous process industries like Steel & Ferro alloy will have to pay INR 1.50 per unit more.
“We told the ministers that the state had the highest tariff in the country and industries were facing difficulties in competing industries located in other states. Already, some Steel & Ferro alloy industries have shifted to Chhattisgarh where tariff was almost half that of MSEDCL,” RB Goenka of Vidarbha Industries Association (VIA) said.
Finance Minister, Mungantiwar told to media that even though the state’s finances were in bad shape, the government decided to prevent industries from a tariff shock. “This subsidy is only for December. We will take the decision on subsidy for January on 12 Dec, 2014. We have also asked MSEDCL to contribute as the state is not in a position to pay full compensation to the distributors,” he said.
Earlier, the government has decided to withdraw subsidy for all categories except agriculture. Fadnavis has told to media that subsidy could not be given forever. The performance of power companies would have to be improved as a long-term solution. He has also said that in the next tariff petition, the industrial tariff would reduce by INR 1 per unit.
Mungatiwar told to media that MSEDCL’s new tariff would come into effect from Feb’15 and it was the question of only 1-month.
The Congress-NCP government had given a subsidy to MSEDCL in Feb’15 for 1-year. It had made a budgetary provision of INR 90 billion for the subsidy. Another INR 15 billion was approved through supplementary grants. The monthly subsidy amount was INR 7.06 billion. Out of the INR 105 billion subsidy, INR 75.43 billion had been spent till November. The government had about INR 30 billion subsidy amount left.
VIA and other industrial associations have thanked Fadnavis and the ministers for extending the subsidy and urged them to give the subsidy in January too.
– Sourced
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