Committee for 15% cut in power tariff for MahaVitaran consumers

The Cabinet committee has recommended reduction in the electricity duty

Nearly 21.4 million consumers of the state-run Maharashtra State Electricity Distribution Company (MahaVitaran) can expect a gift in the New Year, which happens to be an election year, too.

A Cabinet sub-committee headed by Maharashtra Industries Minister Narayan Rane has recommended an across-the-board 15 per cent reduction in existing rates. The committee has also recommended reduction in the electricity duty.

Power rate in Maharashtra is 20-50 per cent higher than other states. The panel has not considered any cut in the rate charged to Mumbai consumers by Tata Power, Reliance Infrastructure, MahaVitaran and BrihanMumbai Electric Supply & Transport (BEST).

If the recommendation is implemented, the state government and MahaVitaran will have to bear a burden of about Rs 2,000 crore annually. Of this, MahaVitaran’s share will be at least Rs 200 crore, while the state government will have to provide the balance through a budgetary allocation.

This will be in addition to the annual subsidy of Rs 10,500 crore provided to agricultural consumers and Rs 1,100 crore to power looms. Of this, MahaVitaran cross-subsidises industry and commercial consumers worth Rs 6,500 crore; the balance is contributed by the state government.

According to the rates effective from September, high-tension industrial consumer power rate ranges between Rs 10.51 and Rs 11.53 a unit; for high-tension commercial consumers, it is between Rs 9.46 and Rs 14.46 a unit. For low-tension industries, it is between Rs 8.07  and Rs 10.06 a unit. For high-tension agricultural consumers, the per unit tariff is Rs 3.83.

A senior minister who was part of the committee told Business Standard: “The Rane committee, which was formed in October to address issues raised by couple of parties and organisations, submitted its report on Thursday evening to the state government. The decision will be taken after the approval of state Cabinet at its meeting slated for next week.”

The minister claimed the state government’s decision has nothing to do with Aam Aadmi Party's move to cut 50 per cent tariff for those consuming below of 400 units of electricity in Delhi.