Industries in Maharashtra are again at the receiving end of State Government fiat as the latest decision to impose additional tax on sale of electricity is going to inflate the power bills. Maharashtra Cabinet at its meeting approved the proposal of Industries Department to increase tax by Rs 9.90/unit on industries, commercial and other categories consumers. At present, MSEDCL and other private power suppliers charge Rs 11.04/unit as tax which is now going to increase to Rs 20.94/unit. As per Cabinet note, the money is being raised to fund the supply of solar pumps to farmers under Kusum Yojana. State has set target of affixing 6.50 lakh solar power run pumps and so far, about 4.23 lakh units have been installed. Since State Government does not have funds to complete the target, it was decided to raise money from bulk power consumers.

 

It may be stated that energy rates for industries in Maharashtra are steepest in the country .The further hike is going to increase power bills by average 1 per cent for industries, felt R B Goenka, energy expert while talking to ‘The Hitavada’. He said the decision is going to disproportionately impact the bulk power consumers as they are already reeling under US tariff shock. Particularly, industries that work round the clock and are known for high energy utilisation would feel the shock of increase in electricity duty as same would increase the working cost. The decision to further increase the duty would hit growth hard. Particularly textile and steel industries would be impacted on a big scale. Many of the industries having monthly bills of Rs 1 lakh to 1 crore may have to absorb the increased duty on electricity sale.

 

However, ultimately the industries would pass on the burden to consumers who will have to pay higher prices for their purchases. Goenka said State Government gives subsidy to industries and then takes it back through such duty hikes, which he felt is unreasonable. Goenka said if State Government had no money to roll out Kusum Yojana for farmers, why were tall promises made when no budgetary allocation was possible. How long can industries foot the bills for farmer vote bank that State Government wants to cultivate. And the State Government did not even have courtesy to consult industry before imposing such steep hike. Export markets are in doldrums and the new hike is going to put additional financial strain on industries.

 

As to commercial category consumers, they are already facing the brunt of hike in raw material. Further, the promised roll down in energy rates has not materialised and the additional tax on electricity sale would strain the finances. The labour cost are already on rise and businesses are already reeling under steep salary pressure and maintaining the business. The time has come for a reality check on the financial health of State Government as the slew of announcements comes at a steep price for all sectors. More the pressure on industries, more of them might prefer to shift manufacturing base of neighbouring States where energy rates are far cheaper than Maharashtra, Goenka feared.