The decision is not applicable to Mumbai consumers who get power supply from private distribution companies – Tata Power, Reliance Infrastructure and BrihanMumbai Electric Supply & Transport.
The tariff cut will lead to an additional financial burden of Rs 706 crore a month on MahaVitaran. The state government will provide Rs 606 crore, while the balance Rs 100 crore will be shared by MahaVitaran and Maharashtra State Transmission Company (MahaTransco). The annual burden will be Rs 8,472 crore.This is in addition to the present annual subsidy of Rs 10,500 crore provided to agricultural consumers and Rs 1,100 crore to powerlooms. Of this, MahaVitaran cross-subsidises industry and commercial consumers worth Rs 6,500 crore; the balance is contributed by the state government.
Power stocks are currently under pressure; NTPC is down 1.18%, Bharat Heavy Electricals Ltd is down 1.82%, Power Grid Corp down 0.71%. The BSE sectoral index tracking power stocks is down 0.46% in the day's trade and is also the top loser among BSE indices tracking various industrial sectors today.
Private power producers and distributors came under selling pressure too. Reliance Power Ltd is down 0.59%, Tata Power is down 0.58%, Torrent Power is down 0.51% while CESC Ltd is down 1.7% currently on the BSE.