Debating India


Centre blamed for power tariff hike

Sunday 29 May 2005

Special Correspondent

Pressure to implement power panel’s directive with immediate effect

JAIPUR: The Rajasthan Chief Minister, Vasundhara Raje, has held the Central Government’s policies and the legal compulsion of accepting the recommendations of the State Electricity Regulatory Commission responsible for the sharp increase in power tariff announced on Thursday. The increase has led to a financial burden of Rs. 392 crores on agricultural and domestic consumers in the State effective from May 1 last.

Ms. Raje, presiding over a meeting of senior officials of the public sector power companies here on Friday, said the State Government was under pressure from the Centre to implement the Commission’s directive issued in December 2004 with immediate effect, failing which it had threatened to put the power corporations in the category of financial mismanagement and increasing deficit.

"The State Government received clear signals from the Centre that the power companies would not get the facility of loan from the Power Finance Corporation and other financial institutions unless the revised rates were charged from the consumers," Ms. Raje said while referring to a meeting chaired by the Union Energy Secretary in New Delhi in February last. The power companies would have been deprived of the benefits of a number of other schemes as well if the tariff was not revised.

Ms. Raje pointed out that the power companies were facing an additional financial burden of Rs. 725 crores annually under the conditions created by the Central Government’s policies, such as revision in the rates of coal twice and increase in the freight charges made thrice. The State’s thermal power stations had to incur an additional expenditure of Rs. 374 crores annually due to the coal price hike, while an additional Rs. 142 crores were spent on the transportation of coal to Suratgarh and Kota thermal plants..

Besides, the power companies had to pay an additional Rs. 209 crores to their employees in the shape of revised dearness allowance following an increase made for the Central Government employees. Ms. Raje said the Commission had no option other than revising the tariff in view of the difficult situation.

The Chief Minister affirmed that despite the adverse conditions, the State Government had exempted 30-lakh of the 54-lakh electricity consumers from the increase by providing a comprehensive "relief package" for the benefit of various sections of consumers.

The relief is applicable to the domestic consumers with low income, below poverty line (BPL) families in both the urban and rural areas, farmers using sprinklers and drip irrigation, and the industrial consumers keeping a good load factor.

Ms. Raje directed the officials of power corporations to implement the relief package effectively, while pointing out that the previous Congress-led Government had raised the tariff twice in 1999 and 2001 that was quite high in comparison with the present increase on both the occasions.

The State Government was now releasing 40,000 new power connections every year under the new agriculture policy, as opposed to a meagre 15,000 connections provided by the Congress regime, said Ms. Raje. She emphasised that the power situation in Rajasthan was satisfactory and was constantly improving, as was evident by the purchase of electricity worth Rs. 600 crores during the past year and a half for being supplied to farmers.

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