Maharashtra plans cheaper power to lure units to poorer regions

Estimates annual burden of Rs 1,100 cr towards subsidy; funding via non-Plan allocation, higher power duty on sale from captive plants

The Maharashtra government plans to provide relief in industrial tariff for new investments in under-developed Vidarbha, Marathwada and North Maharashtra.

This comes close on the heels of Power Minister Piyush Goyal’s announcing the Centre was working on a model of cheap power at a fixed long-term rates for industry. Several industry bodies had cited higher industrial tariff as a major roadblock.

The Maharashtra government wants tariff to be fixed at Rs 4.25-4.50, from Rs 6-6.50 a unit now, to compete with Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Gujarat and Telangana, among others.  The concession proposed in transmission charges are 19 paise a unit for industrial units in Vidarbha, 14 paise in Marathwada and 9 paise in North Maharashtra.

POWER PUNCH

• The state government wants tariff fixed at Rs 4.25-4.50, from Rs 6-6.50 a unit now, to compete with Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Gujarat and Telangana
   
• The concession proposed in transmission charges are 19 paise a unit for industrial units in Vidarbha, 14 paise in Marathwada and 9 paise in North Maharashtra

Fuel adjustment cost, 90 paise now, would be brought down to 30 paise in Marathwada, 40 paise in Vidarbha and 20 paise in North Maharashtra.

Industrial units would be entitled to a tax relief of 9.04 paise a unit on sale of electricity. Industry tariff from 10 pm to 6 am would be lowered by Rs 1 in these regions.

A senior officer told Business Standard, “The government has estimated that it will have to bear an additional annual burden of Rs 1,100 crore towards subsidy to be given to the state distribution utility, MahaVitaran. The subsidy will be provided through non-Plan allocation. The projected outgo for subsidy has been projected at Rs 3,300 crore. The state Cabinet will soon give its approval.”

The government would increase electricity duty on sale of power from captive plants to ease the burden. It has already revised electricity duty to Rs 1.20 a unit from 30 paise, he added.

The government also plans to impost electricity duty on power purchases, especially by industrial units through open access transactions.

The government hopes to mobilise Rs 800 crore annually through this route.