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Amidst lockdown losses, Karnataka's power tariff hike unwarranted, say trade & industry

Say increase will reflect on cost of production of industries

Karnataka Electricity Regulatory Commission’s (KERC) decision to hike power supply tariff, especially during the Covid second wave, has come in for criticism from industries, trade and chambers of commerce in Karnataka.

“The power tariff hike is coming at a time when already we are facing a big blow on account of increase in steel price and as petrol/diesel prices are going up,” said Perikal M Sundar, President of the Federation of Karnataka Chambers of Commerce & Industry.

Expressing his unhappiness on KERC’s decision, Sundar said increase in power tariff would reflect on the cost of production and selling price of raw materials namely iron, steel, forgings and castings which are primary input materials for all the industries including MSMEs.

Karnataka is power surplus and is selling extra power to other States. The transmission losses are also as low as 3-5 per cent. This being the case, we don’t understand the logic behind increasing the power tariff at this juncture, he added.

Burden on MSMEs

Power tariff hike is a burden on MSMEs. The hike in power tariff would be detrimental for the survival of these small scale and micro industries, said Karnataka Small Scale Industries Association (Kassia).

KB Arasappa, President, Kassia, said: “Even though the lockdown may be lifted in a week or so, it is very difficult for the small and medium scale industries as they have suffered a huge loss over the last few months. At this time of crisis, when the MSMEs are expecting a handsome economic package from the State Government to help revive them, the unexpected decision to increase the power tariff has come as a bolt from the blue.

The MSME sector, which provides a large number of jobs, next to the agricultural sector in the State, has been facing a lot of problems these days. Hence, the decision to raise the tariff 30 paise per unit is very objectionable and it will severely harm the MSME sector, he added.

Kassia said with respect to GST returns filing, the government has directed the industries to file the returns by June 4. But as industries have not begun their activities due to lockdown. Even after the clearance of the lockdown, the industries have to face a lot of problems like scarcity of workers, delay in the flow of the money to restore normalcy in the industries etc.