Open House: Is the industry’s demand for the rollback of power tariff hike justified?

Subsidy politics puts pressure on finances

Parties make announcements and offer freebies in the pre-election period; people get convinced with the manifesto and populist announcements and vote for them. But little do they realise the costs involved in implementing such decisions. In Punjab, 300 units of free electricity per month for domestic consumers have put the burden on the state exchequer. The Punjab State Electricity Regulatory Commission (PSERC) has further enhanced the power tariff from 25 paise to 89 paise; and if one adds the taxes, the cost of electricity per unit will rise further. Consequently, the government’s subsidy bill is also set to rise. The industry is well within its right to seek support from the government. When the government can give relief to the common man, it can surely bail out the industry too. The only financial implication of subsidizing everything is that in case the Central Government, World Bank, Nabard or any other competent authority refuses to issue loan for new power projects, it will put pressure on fund-starved PSPCL to run its generation and distribution in future. The industry is the backbone of the economy that provides employment and generates revenue for the state. The government must address the concerns of industrialists.

Rajat Kumar Mohindru

QUESTION

The AAP government has claimed that Punjab is on its way to become a corruption-free state with the arrest of over 300 corrupt officials in the past one year. Do you see any visible change in the functioning of the government offices? Is there more accountability and transparency now?

Suggestions in not more than 200 words can be sent to jalandhardesk@tribunemail.com by Thursday (June 1).

Demand genuine, support them

Without rapid industrialisation, economic development of an agriculture-dependent state like Punjab is almost impossible. For, agriculture and allied activities have been employing 28.9 per cent of the state population, utilising more than 85 per cent of its area, whereas the industry has been providing jobs to 25.15 per cent population in 2022-23 using comparatively a very small proportion of land. This share of the state’s employment in industry has already declined from 38.46 per cent in 2020-21. The state claims to be power surplus today and has promised to provide uninterrupted 24X7 power supply to the industry at an affordable tariff for at least the next five years. Therefore, the demand of industrialists for the withdrawal of the recent power tariff hike is genuine and fully justified. It needs support to face the cut-throat competition with the neighbouring states like Jammu & Kashmir, Himachal Pradesh, Uttarakhand and Haryana where the power supply is not erratic and tariffs are lower. But the recent power hike is going to hit all the billed consumers, be it domestic, commercial, or industrial, especially the 1,72,000 small and medium enterprises and start-ups.

Dr Kulwant Singh Phull

Stop subsidy, spend on power generation

The steep hike in electricity tariff has come immediately after the Lok Sabha byelection. The move should not come as a surprise, considering the burden of subsidies due to free electricity. The present dispensation is liberally dolling out freebies, and one wonders whether this reckless political appeasement would end. Looking at the precarious state of finances and the colossal debt of about Rs 3 lakh crore, it would have been prudent to invest the power subsidy in improving electricity generation infrastructure, adopting latest technology to enhance the efficiency/productivity, resulting in reduction of cost benefiting the ultimate consumer. The deluge of subsidies may lead us to an unprecedented financial crisis which is being faced by neighbouring nations. The absolute need is of good governance as a precursor to development, which is till date just eluding us.

Bakhshi Gurprit Singh

Give tax concessions to industry

All political parties need to make policies that give maximum benefits to the common man. The AAP government’s policy of giving 300 free units of electricity to each household has been well appreciated across the state. To keep the state expenses in balance, the Punjab Government has increased the power tariff. The government is not giving freebies blindly; it has taken many other bold steps to save electricity. For instance, the change in office timings shall save electricity, which can then be utilised for paddy cultivation. In this way, the current dispensation is making every effort to give maximum benefits to all; even the industry will get its due share. Hence, the industry, too, should manage their finances and not demand the rollback of small increase in electricity tariff. However, Punjab needs the industry to propel its growth, so its interests have to be safeguarded. The Central Government wants the industrial production in India to surpass that of China; therefore the Punjab Government in tandem with the Centre can find some alternative to give relief to the industry. The government can think of production or exports linked tax concessions to the industry of Punjab.

Harvinder Singh Chugh

Industry is vital, deserves free power

The recent nod given by the Punjab State Electricity Regulatory Commission (PSERC) to hike power tariff by 8.64 per cent on all categories of consumers in the state has elicited sharp reaction, especially from industrialists. It will hit the commercial and industrial sectors hard. Multiple industrial associations have appealed for its rollback immediately to secure their livelihood in these days of stiff competition. Taking in view the populist policies of the AAP government, the demand is fully justified. If the authorities can bear the huge burden of free electricity amounting to thousands of crores per year on the public exchequer, why shouldn’t the industry sector seek cheap power? After all, it plays an equal role in the development of the state. But this will increase inflation which has already skyrocketed. Factory owners will raise the prices of finished products. Unfortunately, the successive state dispensations have miserably failed to create alternative sources of energy. Due to shortage of coal and the surge in power demand in summer, the authorities have been purchasing electricity from private players at exorbitant rates. It is time to dispense with the unwarranted culture of freebies. People must pay for the services they enjoy. The government can provide energy at comparatively cheaper rates. And the revenue thus collected should be better used for the development of industry and other sectors.

DS Kang

Decision will impact industrial investment

Going against the state’s industrial policy, the recent decision of the PSERC giving green signal to power tariff hike of 25 paise to 89 paise per unit with effect from May 16 after two days of winning the Jalandhar parliamentary byelection has drawn flak from the Opposition and the industry in particular. Industrialists are already reeling under losses in the aftermath of the Covid pandemic with the dearth of raw materials and the rising cost of manufacturing. How would they bear this additional burden? They argue that power rates are already higher compared to Haryana or Rajasthan. The new hike will discourage new investment in the state’s industrial sector which will be detrimental to its growth. Amid protests, several industry associations have demanded its withdrawal to enable them to survive in this era of cut-throat competition as it will impact the cost of industrial products. The argument they advance is very simple: At a time when the state government is giving free electricity to the farmers, and 300 units to domestic consumers, why should they pay their electricity bills through their nose? They have also given a call for mahapanchayat to protest against the move. If the government still persists, it will amount to a betrayal of public trust. It is time to support the problem-ridden industry for the development of the state.

Parvaan Singh Kang

Cost of power generation up, hike just

During the Jalandhar Lok Sabha byelection, the AAP government strongly pitched the fulfilment of its guarantee of free electricity up to 300 units a month. But soon after the bypoll win, the PSERC raised the power tariff by 25 to 89 paise per unit for different categories of consumers. The power generation is getting expensive, and PSPCL’s debt is accumulating due to the government’s subsidy on power to MSMEs and zero bills to domestic consumers, besides free power to the farm sector. The current hike to check the losses due to these sops is attracting strong criticism from the industry. CM Bhagwant Mann has clarified that the revised rates would not affect the common man as the government would bear the burden of hike. However, the industry is asking for its rollback as it has to bear the brunt of rise in power tariff under the realm of cut-throat competition in the market. They have called upon the government to devise an autonomous mechanism accountable for financial balancing which may check the doling of freebies to a segment of society at the expense of others for mere political populism. The whooping debt as a consequence of freebies lacks prudent financial restructuring. The industry being the backbone of employment for our large populace obviously needs to be dealt carefully in the wake of threadbare margins. Nevertheless, the current increase in tariffs is understandable as the cost of power generation has risen sharply.

Nirmaljit Singh Chatrath

Let Central Govt decide uniform rates

The moment the Jalandhar Lok Sabha byelection got over, the Punjab Government increased power tariff for all categories of consumers. However, Chief Minister Bhagwant Mann was quick to issue a statement that the tariff hike was not going to impact the domestic category and the agriculture sector. For the common man, it is difficult to calculate the hike, which seems so complicated. In my opinion, there is no need to give free electricity. Instead, cut down the rates per unit. Let people pay for the services they use, so they too can say that they have contributed to the state’s growth. I would suggest that the Union Ministry for Power should have the same electricity rates applicable all over India so that parties do not take mileage during the election. Educate the people to conserve electricity.

Shashi Kiran

Look for alternative sources of power

The demand of the industrialists to roll back the hike in power tariff is not justified. The move was impending and bound to happen, considering the humongous losses which PSPCL is incurring in fulfilling the “power freebie” of the government. The damage cannot be undone and the apparent ‘bonanza’ is turning into a nightmare with frequent power cuts as a measure to recover the amount of loss from the common man. The consequences of the populist decision are in front of us. Industrialists, instead of crying over the tarrif hike, should try adopting other means of power generation, like solar panels, etc, doing which they would be even able to avail of subsidies and other incentives. They should explore other alternatives to cut down the cost of production and to beat the competition. Thus, accepting the decree as something destined, the industrialists, and also the remaining populace, must be wary of any future self-centered policies of the government.

Anshika Kohli

Govt should cushion effect of tariff hike

The government recently announced a power tariff hike of 25 paise to 89 paise per unit on all categories. Industrialists are not pleased as it comes as a great loss to them. On average, an industry uses 45,000 units of electricity every day. India is a developing country and industries play an important role in building the infrastructure in any nation. Because of the move, the industrialists will suffer as their finances will be affected. The government should be helping hardworking and tenacious men instead of burdening them with loads of taxes. The factories will eventually hike the rate of the finished goods in supply to cope with tariff hike. If the government really wants to help the public, it should raise the rate of electricity per unit for the market gradually. It should also come up with polices to cushion the effect of the rise in the tariff.

Lakshit Jindal

Govt should help boost trade in state

On one hand, the state government spends a lot of money to attract investors from different states and abroad to invest in Punjab, and on the other hand, steps like hike in power tariff act as a repellent. Our politicians should go down the memory lane and follow in the footsteps of Guru Ram Das, who after laying the foundation of Chak Ram Das (Amritsar) in 1577, brought people from 52 trades and professions and had them settle them in the city. He brought in cloth merchants, goldsmiths, washermen, potters, carpenters, tailors, sweet makers, dyers, gardeners, masons and painters from different parts of the world. Maharaja Ranjeet Singh, during his reign in Punjab, brought in five Marwari families from Rajasthan and had them settle near the Golden Temple to give a boost to economic activities in the holy city. In these modern times, unfortunately, leaders from different political outfits are ruining trade and industrial activities, instead of encouraging them. Our city once occupied a place of pride throughout the world for its famous products like shawls, blankets, jewellery, textile machinery, electric fans, and handicrafts. But the holy city has lost its position due to poor policies implemented by successive governments. Our state government must take some practical steps to help us regain our pride of place.

Naresh Johar

Industrialists can bear tariff hike

The demand for the withdrawal of the power tariff hike is not justified at all. The power tariff hike is the need of the hour for the PSPCL, which has already been reeling under a huge financial crisis. Yes, there is cut-throat competition in the market. But industrialists can easily afford to bear the tariff hike. It is within their means. Their hues and cries pale in comparison to the government’s efforts in reviving the ailing PSPCL.

Sanjay Chawla

Decision to hike tariff is welcome

The recent decision by the Punjab State Electricity Regulatory Commission to increase the per unit price of power by Rs 0.25 to Rs 0.89 in all categories has been met with sharp reactions from the industry. However, I believe this move is necessary for the developmental process, as revenue is needed for the increasing cost of developmental material. It is important to note that the government has also assured free power to farmers and power subsidies to industrialists, while consumers are entitled to 600 free units, mitigating the impact of the tariff hike on them.

Jasleen Kaur

Reaction from public mostly absent

It is surprising that public reaction to this price hike has been almost absent. As long as households are receiving their 600 free units, they do not seem to care about the cost of production and transmission. It is also worth questioning why income taxpayers, pensioners and government servants are also included in these freebies, when they have not asked for them. Eventually, the cost of production will have to be paid for at some level. Furthermore, it is frustrating that the detailed supply bill received at the end of every two-month cycle has about 50 entries, making it difficult to ascertain the exact rate. The government should take steps to simplify these bills for the benefit of the public.

PROF MOHAN SINGH