Bengal business chambers demand subsidy after power hike


Kolkata : Several chambers of commerce in West Bengal Tuesday described the recent tariff hike by the West Bengal State Electricity Distribution Company Limited (WBSEDCL) as “exorbitant and irrational” and sought a subsidy of Rs.1 per unit from the government.

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The chambers claimed that many manufacturing units were “on the verge of closing down” due to the tariff increase and called for immediate intervention of the state government to bring the industries out of the red and prevent future job losses.

“The recent over 40 percent power tariff hike announced by WBSEDCL will affect all the sectors – iron and steel, textiles, paper, tea, jute, plywood, engineering dairy and others that operate in the areas served by the WBSEDCL,” Hooghly Chamber of Commerce and Industry president Sandeep Poddar told media persons here.

He alleged that the recent tariff hike of Rs 1.50 a unit was the highest in the “history of power sector in the country”.

West Bengal is the only state in the country where five bulk supply licesees supply power. Three of them – WBSEDCL, Damodar Valley Corporation (DVC) and Durgapur Projects Limited (DPL) – mainly provide power to industries.

“The competitiveness of industries in the WBSEDCL zone has been affected, while DVC and DPL are providing industrial power at lower rates.”

WBSEDCL has increased the power rate for 2010-11 by approximately Rs 1.75 per unit from Rs 3.95 to Rs 5.70 per unit.

In contrast, the DVC is providing power at Rs 2.94 and DPL at Rs 3.51 per unit.

“Since there would be a difference of more than Rs 2.50 in power rate of WBSEDCL as compared to DPL and DVC, it would seriously disturb the level playing field for the industries in the state,” said Jitendra Agarwal, director, Rashi Metals Ltd.

The chambers said if the state government provided a Rs.1 subsidy per unit of power, it would incur a cost of only Rs.250 crore.

“This is a small amount. Recently, the Andhra Pradesh and Rajasthan governments reimbursed Rs. 9,000 crore and Rs.5,000 crore respectively to their electricity boards to subsidise power to industries,” Poddar said.

He said the chambers had sought an appointment with state Industries Minister Nirupam Sen next week. “We will knock all doors and take all steps to save the industries form closing down”.