Punjab FM, power minister to meet industry over govt’s non-fulfilment of Rs 5 per unit promise
Captain Amarinder Singh-led Congress government had assured the industry that from November 1, it will provide power at Rs 5 a unit; but due to lack of funds, the promise has not materialised.punjab Updated: Dec 19, 2017 10:28 IST
To pacify the industry in the state that is upset over non-fulfilment of the state government’s promise of providing power at Rs 5 per unit from November 1, finance minister Manpreet Singh Badal and power minister Rana Gurjeet Singh will meet industry representatives on Tuesday.
The meeting is being held on the directions of chief minister Captain Amarinder Singh.
Speaking to Hindustan Times, additional chief secretary of power department, Satish Chandra, said the ministers will hear the grievances of the industry representatives and submit a report to the state cabinet on Wednesday.
In its report, PSERC mentioned that the government has yet not paid Rs 2,900 crore on account of the subsidy of providing free power for tubewells
The Captain Amarinder Singh-led Congress government had assured the industry that from November 1, it will provide power at Rs 5 a unit. However, owing to lack of funds, the promise has not been materialised. Subsidised power to the industry entails an additional burden of Rs 2,768 crore per year on the state exchequer. The government is already facing an acute financial crunch and is in no position to pay the subsidy. The electricity act of 2003, makes it mandatory for the state government to pay the subsidy in advance to the Punjab State Power Corporation Limited (PSPCL).
Speaking about Tuesday’s meeting, the power minister said, “We are trying to find a way out but I can’t elaborate on this at present. We will talk to the industry representatives and submit a report to the state cabinet for its consideration.”
‘Industry getting bills based on hiked rates’
On October 23, the Punjab State Electricity Regulatory Commission (PSERC) had increased power tariff for industry by 8.5 to 11.88%. In its order, PSERC had increased the variable tariff for small, medium, general industry and arc furnaces between Rs 5.48 and Rs 5.74 a unit, besides a fixed charge of Rs 85 to Rs 160 (per kVa). Thus, the effective tariff hike was Rs 7.70 per unit and the percentage increase for different industries ranged between 8.5% and 11.88%.
The industry is also complaining that PSPCL has already started sending power bills based on the increased rates. They further claim that bills based on the hiked tariff rates will put an additional burden of Rs 2,200 crore on the industry.
Besides this, industry representatives have also expressed concerns that from January 1, they will have to pay arrears of the bills with a retrospective effect from April 1, 2017. This payment will be spread over nine months in the next year.
“Power bills for the industries have been calculated based on the hiked rates. This will make businesses unviable,” said Rupinder Singh Sachdeva, president of PHD Chamber of Commerce and Industry, an industry lobby group.
He added: “The arrears of power bills from April 1, 2017, will put an enormous burden on the industry. I suggest that the payment should be spread over 15 months, instead of nine months.”
The day when the power tariff hike was announced, the chief minister had promised that his government will honour its promise and that subsidised power will be provided to the industry for five years.
Speaking about the state government’s promise, Mohinder Gupta, president of State Arc Furnaces Association, said, “Why did the government made the promise when its coffers are empty?”
Successive state governments have delayed subsidy on power. In its report, PSERC mentioned that the government has yet not paid Rs 2,900 crore on account of the subsidy of providing free power for tubewells. At present, the pending payment on account of subsidies for the current financial year is Rs 10,908 crore. This excludes the subsidy for providing power at Rs 5 per unit to industry.