Punjab industry seeks rationalisation of free power

Last Updated: Friday, April 12, 2013 - 18:57

Chandigarh: Punjab industry today demanded that the state government rationalise free power consumption by the farming community to contain "misuse" of energy and minimise the financial burden faced by the industrial sector.

"This is the prerogative of state government with regard to giving free power to farming community. (But) we are just saying rationalise the consumption of electricity on tubewell (being given to farmers in Punjab)," Vardhman Textiles Ltd Director D L Sharma told reporters at a CII event here.

Supporting the rationalisation of free power in Punjab, CII Chairman (Northern Region) Jayant Davar said the misuse of free power should also be stopped.
Industry pointed out that it was the state industry, which was bearing the burden of free power, being given to the farmers by the Punjab government.

"Due to free power supply to the agriculture sector, the cross subsidy burden on the industry has grown consistently in the last few years," said Sharma, adding that matter would be taken up with Punjab Chief Minister Parkash Badal and PSERC to relook at the issue of power tariff.

The level of cross subsidisation of agriculture has increased from 17.68 per cent to 22.97 per cent which more than the limit of 20 per cent set by National Tariff policy.

The power regulator Punjab State Electricity Regulatory Commission (PSERC) has worked out the cross subsidy at Rs 2,042.72 crore for 2013-14 in its new tariff order.

Cross subsidy is the difference between the average realisation per unit from a particular consumer category and the combined average cost of supply expressed in percentage terms.

The state`s industry also expressed displeasure at the low increase in farm power tariff by the regulator. "The average hike in power tariff for domestic and industry is in the range of 9-12 per cent but in case of agriculture, increase is even less than 2 per cent," said Sharma.
Power regulator has announced average hike of 9.06 per cent in power tariff across all categories for 2013-14 but the maximum hike was effected in industry category at 12.83 per cent.

Accusing the state government of having anti-industry stance, Federation of Association of Small Industries (India) asked the government to stop free power to farmers.

"Free power to farmers should be stopped altogether because power subsidy is putting additional financial burden on the industry," FASII, President Badish Jindal said.

He said to protect the interest of farmers, the government could increase the MSP of crops to compensate for increase in any input cost. Punjab industry has already projected a financial burden of Rs 1,600 crore because of power tariff hike.

To woo farmers major vote bank for SAD (B) party, the ruling combine SAD-BJP led Punjab government has been giving free power to about 10 lakh farmers in the state. PSERC has worked out subsidy on account of free power to farmers at Rs 4,778.13 crore for 2013-14.


First Published: Friday, April 12, 2013 - 18:57

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