Industry requests govt to not withdraw power subsidy
Tribune News Service
Solan, August 28
Various industry associations have requested the state government to not withdraw the subsidy on power tariff as it will adversely hit the economics of industry and trigger their exodus.
While 50 per cent power tariff has been increased in the last two years, as much as 20-25 per cent hike was effected this year alone, opined industry sources.
“This year effective from April 2024, increase in power tariff was exceptionally high at the rate of Re 1 per unit for all category of consumers except those with power load of less than 50 KW, where the increase is Re 0.75 per unit,” informed Rajiv Singla, general secretary, HP Steel Industries Association.
Though the state government promised to subsidise this increase, now there is talk of withdrawing that commitment. This is perhaps the highest increase in the history of HP State Electricity Board Limited (HPSEBL). Not only this, the state government increased the electricity duty (ED) to a level which is highest in the country, he added.
“Combined, this increase works out to be 20-25 per cent on the existing tariff and if last year’s increase is added, it will work out to about 50 per cent in the last two years,” said Singla.
Himachal Pradesh was known as the power surplus state, where cheaper power was used as the unique selling point for attracting investment. This advantage has, however, been lost as power tariff is now at par or higher than adjoining states of Punjab, Haryana and Uttarakhand.
The government should instead work to make the HPSEBL a commercial organisation in the real sense by rationalising its employee cost, which stands at about 33 per cent of the total revenue earned compared to about 6 per cent in Uttarakhand and about 15 per cent in Punjab. This is highest in the country and exorbitant in business parleys, claim the industry representatives.
“The state government while announcing this new tariff, committed in writing to the State Electricity Regulatory Commission to absorb this increase of Re 1 by way of extending subsidy to the HPSEBL for the year 2024-25 and it is explicitly mentioned in the tariff order,” remarked Rajiv Aggarwal, president Baddi Barotiwala Nalagarh Industries Association (BBNIA).
“The state government on August 21 has, however, decided to withdraw the subsidy for hotels and other commercial establishments whereas for industry, the final decision would be taken at a meeting to be held between the Chief Minister and the Industries Minister on September 2,” informed Aggarwal.
Industry in Himachal Pradesh is already passing through tough times of survival because of imposition of more state-level levies like additional goods tax, certain goods carried by road tax, high transportation cost due to cartelisation and higher cost of manpower. If the withdrawal of subsidy on electricity tariff is announced, it will prove fatal for the survival of the already ailing Industry.
“Industry has already started migrating to neighbouring states as these states are offering very attractive incentives for bringing investments, besides no additional taxes and cartelisation of transportation. This withdrawal of subsidy will make the industry totally uncompetitive and exodus from the state will speed up,” added Aggarwal.
“Industry in the state employs more than seven lakh people directly, provides work to more than 30,000 transport vehicles and consumes 60 per cent of the total electricity sold by the HPSEBL, besides payment of taxes,” remarked YS Guleria, general secretary, BBNIA.
The industry has made a fervent appeal to the state government for not withdrawing the power subsidy to maintain and further enhance economic activities, along with keeping the credibility of government’s own commitment.
