FKCCI says power tariff hike will lead to closure of industries

Bengaluru: Perikal M Sundar, president of the Federation of Karnataka Chambers of Commerce & Industry (FKCCI), Bengaluru, expressed his unhappiness over the decision of Karnataka Electricity Regulatory Commission (KERC) on power tariff hike which came into effect from November 1.

He said, "An average increase of 40 paise per unit with respect to Bangalore Electricity Supply Corporation Limited (Bescom) allowed by KERC would put a heavy burden on all categories of consumers and affect the economy as it would push up the prices of raw materials like iron, steel, forgings and castings which are primary input materials for all the industries including MSMEs."

"Though this may look like a small amount, for industries that are paying huge power bills, it would be a big blow. The efforts made by the State government in bringing attractive and investment friendly Industry Policy 2020-25, laudable reforms in Industry Facilitation Act and bold reforms in Karnataka Land Reforms Act to attract investments and to generate employment will be in vain because of power tariff hike decision of KERC," he observed.

Sundar said that the industries are on downward trend as reflected in the closure of 15% to 20% of units in the Sate and loss of employment of a lot of people due to the Covid-19 pandemic. The drop in production capacity to 40% - 60% is another sign of slump.

"In such a situation, it is not advisable to hike the power tariff and FKCCI had made representation to the Department of Energy, Government of Karnataka, and also KERC not to hike the power tariff for the next three years. FKCCI strongly objects to the power tariff hike announced by KERC and demand that the government withdraw the move. FKCCI would like to inform the government that if this power tariff is not withdrawn, industries will be forced to close down their operations. In the event we have no alternative but to hand over the keys to the government after closing the units," he warned.

"Only if the ESCOMs provide quality, reliable and continuous power supply at an affordable price, can the State hope to attract investments and generate employment. The current increase in tariff does not augur well for attracting investments worth of Rs 5 lakh crore and generate employment for 20 lakh people, reach 3rd position in merchandise exports in the next 5 years and maintain industrial growth rate of 10% per annum as per the objectives of Industrial Policy, 2020-25 announced by State government," Sundar explained.