Reconsider ID fee on power, cess on fuel: CII | chandigarh | Hindustan Times
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Reconsider ID fee on power, cess on fuel: CII

Expressing surprise at Punjab government's decision to levy 5% Infrastructure Development (ID) fee on power tariff and `1 cess on petrol and diesel, the Confederation of Indian Industry (CII) has asked the Punjab government for a rethink on the matter.

chandigarh Updated: May 22, 2015 22:37 IST
HT Correspondent
Chandigarh

Expressing surprise at Punjab government's decision to levy 5% Infrastructure Development (ID) fee on power tariff and `1 cess on petrol and diesel, the Confederation of Indian Industry (CII) has asked the Punjab government for a rethink on the matter.

"This fee and cess has taken industry in Punjab by surprise. Energy costs are the major component of any trade and manufacturing unit. The state government's decision will certainly impact the competitiveness of the state's industry. It will also hamper Punjab's plans to attract new investments," said DL Sharma, convener, CII's Punjab public policy and advocacy panel. Sharma is also the director of Vardhman Textiles Limited.

CII Punjab State Council chairman and managing partner, Bhogal Sales Corporation, SS Bhogal, said, "The intent of the state government to upgrade the state's infrastructure is good. However, this decision will slow the growth of energy-intensive industry and make the state industry uncompetitive vis-a-vis neighbouring states."

In its statement, the CII has also appealed to the state government to relook its policy of cross-subsidising power supplied to the farm sector.

"This policy at the expense of industry and trade is not economically sustainable. Thus the state is facing a huge fiscal and revenue deficit adversely impacting the socio-economic growth," it said.

It has suggested that this power supply must be rationalised, where the government can allot a particular number of free units of power to farmers based on his crop need.

"If the farmer is able to irrigate the fields within his fixed quota, he should be able to redeem the balance units for cash, whereas if the farmer overshoots his quota, then he should be charged for the number of excess units," the industry body has suggested.

OBJECTIONS

Hits competitiveness
" Energy costs are the major component of any trade and manufacturing unit, rendering the state's units competitive against the other states
Red signal to investors

" Investors are likely to factor in the additional cost and would be unwilling to put in money, hitting the growth of the state

SUGGESTION BY CII

The CII has also appealed to the state government to relook its policy of
cross-subsidising power supplied to the farm sector. It has suggested that this power supply must be rationalised, where the government can allot a particular number of free units of power to farmers based on his crop need.