VIDARBHA'S POWER WOES :XI High Tariff REDUCED INCENTIVE pinch Vidarbha industries Hard

 

By Ravi Chandpurkar  

 THE industries in industrially backward Vidarbha region are caught between the two saws -- high electricity tariff and reduced incentive under Government scheme.Already burdened by high tariff, these industries are facing a new problem -- incentives have been reduced under the new scheme as compared to the old one. Coupled with long delays in getting those incentives, this particular development has left the industries in Vidarbha dejected, taking cognisance of which the Vidarbha Industries Association ( VIA) has urged the State Government to restore the old incentive scheme with an extension up to March 31, 2029. According to Prashant Mohota, Secretary of VIA and Chairman of VIA Energy Forum, there is a huge difference in the old and new incentive schemes. Under the old incentive scheme for large and efficient units, the incentive offered was at Rs 2.40 per unit of electricity consumption. Under the new incentive scheme, this incentive has been reduced to 90 paise per unit.

 

There is, thus, a huge difference of Rs 1.50 per unit between the incentive offered under the old and new schemes. Similarly, for small and inefficient units, the incentive was Rs 1.90/unit under the old scheme. Now, under the new scheme, the incentive has been brought down to 80 paise. Again, there is a big difference of Rs 1.10 per unit in incentive offered under the old and new schemes. The new scheme with reduced incentive came only after followup by VIA. After VIA made numerous submissions to the State Government, the latter formed a Cabinet Sub-Committee on July 7, 2023 to revise the Power Subsidy Scheme. On March 5, 2024, a Government Resolution was issued extending the Old Power Subsidy Scheme until March 31, 2027, with a commitment that the Cabinet Sub-Committee would decide on the New Scheme, considering that Rs 1,200 crore sanctioned in the budget was unutilised. The new Vidarbha and Marathwada Subsidy Scheme, which replaced the original scheme from 2019, has seen delays and huge reduction in incentive released so far. During 2022-23 and 2023-24, the amounts released were significantly lower than the budgeted amount of Rs 1,200 crore each year, Mohota added. Industries have bulk consumption of electricity. As such, additional burden of Rs 1.90/unit or Rs 1.10/unit, due to reduction in incentive, may result in increase in energy bills by thousands of rupees per month. Vishal Agrawal, President ofVIA, said that extraordinary high power tariff as compared to neighbouring States like Chhattisgarh and Madhya Pradesh was discouraging the industries away from Nagpur. He cited examples too. Two large industrial houses of Nagpur migrated out of the region and invested thousands of crores of rupees in setting-up new plants in Raipur about 15 years ago. Sarda Energy and Neco Group have expanded their operations and invested heavily in setting-up their steel plants in Raipur because of the lower cost of power in Chhattisgarh. A large number of companies keen on making investment are moving clear of Nagpur as a suitable 

 

 

industrial destination on account of high power tariff in Maharashtra. Recently, VIA made a submission to the Additional Chief Secretary (Energy), Government of Maharashtra and member of the Board of Directors of Maharashtra State Electricity Distribution Company Ltd (MSEDCL). In it, VIA raised several urgent issues affecting the industries in Nagpur and urged the State Government to convene the Cabinet SubCommittee to introduce a New Power Subsidy Scheme from April 1, 2024 to March 31, 2029. The MERC SoP Regulations, 2021, increased the security deposit for industries in Maharashtra from one month’s average electricity bill to two months. With the continuous rise in power tariffs and Fuel Adjustment Charge (FAC), this adds a huge burden on industrial consumers, despite timely payments. Hence, VIA sought the security deposit requirement to be restored to one month instead of two months presently, and also to file an application before the MERC to amend the said Regulations of 2021. VIA has requested the State Government to issue new guidelines for delegating power from the Director of Operations (DOP) Mumbai to the Superintending Engineer (Operations and Maintenance) Circles, specifically for Standard Operating Procedures (SOPs) and NonStandard Operating Procedures (Non-SOPs). “The new guidelines should clearly outline the scope, responsibilities, and authority limits for Superintending Engineer in regional places like Nagpur, ensuring seamless execution of operations and maintenance tasks. This is also necessary to get refunds and special permissions at the regional level so that a person does not have to go to Mumbai to get work done,” Mohota elaborated.