Draft proposal to reduce duty on industries, power dept told

The move follows the discontent expressed by Opposition legislators during the monsoon session; under the revised rates, the electricity duty for high tension (HT) industries surged from 11% to 19%

The Himachal Pradesh government is considering reducing the recently hiked electricity duty imposed on industries within the state. The move follows the discontent expressed by Opposition legislators during the monsoon session. They demanded a reduction in hiked electricity tariff for industries and industry minister Hashwardhan Chauhan had assured them to reconsider the decision. Subsequently, the energy department has been directed to draft proposals for cabinet approval.

In light of the ongoing debate and concerns raised by stakeholders, the government has now decided to revisit the issue and explore potential revisions to the electricity duty rates for industries in the state.

The proposal, which gained approval through cabinet members’ signatures in August, led to new electricity rates coming into effect for industries on September 1. Tariffs for domestic, agricultural, and irrigation consumers remained untouched.

Under the revised rates, the electricity duty for high tension (HT) industries surged from 11% to 19% .

Meanwhile, extreme high tension (EHT) industries witnessed a similar increase from 13% to 19%, small and medium industries now face a higher electricity duty of 17%, up from 11 %, while cement plants experience a substantial hike from 17% to 25%. Furthermore, a new duty of 45 paise per unit had been imposed on electricity generated by diesel generator (DG) sets.

In addition to these changes, the government has rescinded exemptions previously granted for electricity duty on captive generation and green energy. Surprisingly, this proposal did not feature in the cabinet meeting held on August 24. Subsequently, the government adopted an alternative approach, circulating the proposal among ministers and securing their approval.

Opposition to this government decision continues to mount, with various industry organisations expressing their discontent. In light of the ongoing debate and concerns raised by stakeholders, the government has now decided to revisit the issue and explore potential revisions to the electricity duty rates for industries in the state. It was in March this year that the Himachal Pradesh Electricity Regulatory Commission increased electricity tariffs.

Himachal Pradesh Electricity Regulatory Commission (HPERC) increased the electricity tariffs for all consumers by 22 paise per unit for the financial year 2023-24. The new tariff became applicable from April. The overall electricity tariff increase in terms of percentage is less than 4% only for FY 2023-24.