‘Businesses will be forced to shut down or shift to other States where electricity charges are less’

Mysore/Mysuru: The Mysore Chamber of Commerce and Industry (MCCI), represented by its President K.B. Lingaraju and KIADB Industrial Area Manufacturers Association (KIAMA), represented by its Vice-President K. Ravindra Prabhu, have expressed shock and disappointment over the steep increase in electricity rates effected by the Congress Government.

The average increase of Rs. 1.47 per unit, charged in the form of fixed and energy charges, is pushing industries, especially small-scale industries, towards closure, they said.

In a joint press release, they said that method of charging ensures a constant income for the Chamundeshwari Electricity Supply Corporation (CESC), regardless of whether consumers use electricity or not. CESC claims that it estimates a loss of Rs. 1,050 crores for the financial year 2023-2024. Lingaraju and Prabhu lament that even home and cottage industries have not been spared from this increase.

Various businesses, including laundry, bakeries, fodder choppers, milking machine operators, telephone booths run by physically challenged individuals, silk rearing and reeling units, small artisans, job typing services, Sulabh and Nirmal Shouchalayas (public toilets), STD/ISD/fax facilities and even astrologers are affected by this hike. The losses incurred are mainly due to the flawed policies, irregularities and inefficiency of CESC, they noted.

MCCI and KIAMA also highlight the issue of internet service providers illegally using distribution infrastructure without adhering to safety norms. Other losses are attributed to the failure to charge BJ, KJ, LT4(a), HT3(a), resulting in a loss of Rs. 482 crore.

“The delayed payment of default amounts incurs an interest loss of Rs. 162 crore while the purchase of high-cost energy amounts to Rs. 720 crore. Additionally, the interest on long-term capital loans accounts for Rs. 261 crore. The total loss incurred amounts to Rs. 1,625 crore. CESC’s financial mismanagement is penalising consumers without improving its own business performance,” they noted.

They urged the State Government to defer the power hike until normalcy returns to the economy. The tariff increase has distressed the industry and trade sector, which is already grappling with various challenges beyond its control.

The higher power bills, with an additional Rs. 2.89 per unit for the current month, adversely affects product prices and reduces profit margins. Micro and small-scale industries, as well as small traders, are finding it increasingly difficult to survive due to high input costs, they said.

Lingaraju warned that if recurring costs such as power continue to rise, businesses may be forced to shut down. He adds that businesses operating in other States may explore the possibility of relocating to States where costs are lower.

“We appeal to the Government to engage in discussions with industry and trade representatives, understand our situation and only then consider tariff revisions,” they added.

They cautioned that any increase in fiscal expenditure should not come at the expense of the industry, which is already struggling to sustain itself. Imposing additional burdens on the industry could lead to drastic measures such as business closure, relocation to other States or reduced employment.

Drop power tariff hike: MIA

Strongly condemning the CESC’s decision to hike power charges across all categories, the Mysore Industries Association (MIA) and MSME Council General Secretary Suresh Kumar Jain has urged the Government to drop the hike.

In a press release, Jain said that though CESC had collected Fuel Adjustment Clause (FAC) charges every month, the CESC’s action of hiking the power tariff is nothing but illegal. Also, CESC had not notified the hike either on its website or through a press notification earlier. Now, all of a sudden  CESC has issued a circular on May 31 for hiking power tariff by Rs. 2.42 a Unit, which is nothing but a deadly blow to Medium and Small Scale Industries. Hence, CESC should repeal the FAC tariff hike in the interests if Industries, he said. The industrial bodies will move KERC (Karnataka Electricity Regulatory Commission) if CESC does not withdraw the tariff hike, he said.