AP industry will lose competitive edge: CII

Published: 08th January 2013 11:54 AM  |   Last Updated: 08th January 2013 11:54 AM   |  A+A-


Expressing concern over the proposal to hike power tariff, the Confederation of Indian Industries has warned that higher electricity charges will make both small and large companies in the state less competitive to those in other states.

“The proposed hike is expected to have a burden of `607 crore for small-scale and `4,728 crore for large-scale industries,” said Suchitra K Ella, chairperson of CII-AP chapter, on Monday.

The proposed hike for industries would lead to increase in the cost of production and would make industries in Andhra Pradesh less competitive compared to their counterparts in other states, she said.

The CII said the state government justified the power tariff hike citing increasing power revenue deficit. “Instead of hiking power tariff, the government could have reduced power subsidies and resorted to better expenditure management methods,” she said.

The move comes at a time when the industry is currently facing issues due to the imposition of Fuel Surcharge Adjustment. In Oct last, the power utilities had imposed FSA charges ranging between 10 and 15 per cent on all categories of consumers for the power consumed in the last two years.

The CII said industry was unable to meet the minimum production demands due to frequent load sheddings and power holidays. As the industries were already reeling under power shortage, hike in  charges would lead to greater burden on them, Ella said.


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