The Himachal Pradesh Electricity Regulatory Commission (HPERC) has abolished the night concession of Re 1 per unit of power, effectively increasing cost. This is a severe blow to the state’s industry, which is already suffering losses due to various state-level levies.
The decision has widened the cost gap with Punjab, where the industries still enjoy a night concession of Rs 1.20 per unit, making Himachal’s power tariffs costlier by 50 paise per unit.
Investors, who are fearing that this decision will lead to a decline in industrial productivity, opine, “If this disparity persists, factories will shut down or move out of the state in the next two or three years, leading to massive job losses and economic decline.”
They demand immediate restoration of the Re 1 per unit night concession to match benefits granted in Punjab and the adoption of a transparent and fair tariff rationalisation.
Rajiv Singla, general secretary, Himachal Pradesh Steel Industries Association, says that it is a sly attempt to increase power tariff. “The decision to do away with the Re 1 per unit night concession from April 1 has resulted in a 35 paise per unit increase in effective power cost, further straining the industries.”
He says, “Over the past three years, electricity tariffs in Himachal have surged by over 50 per cent, making operations unsustainable for many industries.” He adds, “Punjab is offering Rs 1.20 per unit of power as night concession while the state’s industry is now facing a 50 paise per unit disadvantage, which will push them to either close down their operations or relocate elsewhere.”
Megh Raj Garg, association president, says, “First, the government lured industries with power subsidies and when we invested, it is bent upon driving us away by making electricity unaffordable. How can we compete when electricity in Punjab is 50 paise per unit cheaper?
He adds, “This is not just about higher costs but also about survival. If this decision isn’t rolled back, Himachal will see a wave of factory shutdowns in the coming years.”
Rajiv Aggarwal, president of the Baddi-Barotiwala Nalagarh Industries Association, says, “In the past two years, the state government has withdrawn power subsidy and increased electricity duty. Further, with the imposition of milk cess and environment cess on power, the industry has been burdened with almost a 50 per cent hike in cost, which is the highest increase in the history of HP State Electricity Board Limited.”
The state’s power tariffs have surpassed that of Punjab where the government has extended additional concession by reducing fixed charges. The tariff order of the HPERC is against the interests of the industry, which is already grappling with the lack of infrastructure, high transportation cost due to cartelisation of transport and the imposition of specific levies.
YS Guleria, general secretary of the BBNIA, says, “We appeal to the state government to rationalise power tariffs and make them cheaper than those in neighbouring states, as the Chief Minister had promised to do.”
Survival at stake
First, the government lured industries with power subsidies and when we invested, it is bent upon driving us away by making electricity unaffordable. This is not just about higher costs but also about survival. If this decision isn’t rolled back, Himachal will see a wave of factory shutdowns in the coming years.
Megh Raj Garg, president of Himachal Pradesh Steel Industries Association
