Industry shocked over levy on power tariff

Sarbjit Dhaliwal

Tribune News Service

Chandigarh, May 21

With the levy of 5 per cent infrastructure development (ID) fee on power tariff, the state government has undone the relief given recently by the Punjab State Electricity Regulatory Commission by reducing the tariff for certain sections of consumers and by deciding not to increase tariff for most other categories.

The government has made the regulatory commission’s power tariff order for 2015-16 redundant by levying the ID fee. The commission is a constitutionally created body which issues the tariff order after interacting with all sections of power consumers and holding public hearings at various places. 

After a long exercise, the commission had concluded that the power tariff was on the higher side for certain sections of consumers and had reduced it accordingly. The government has levied the ID across all sections of consumers.

Various power consumers are already paying 13 per cent electricity duty that goes directly in the government’s kitty. The projected revenue from the power tariff for the current fiscal year is Rs 24,412 crore. With the levy of 5 per cent ID fee, the government would earn a revenue of about Rs 1,220 crore. It is not confirmed yet whether the government will pay 5 per cent ID fee on power subsidy it pays to Punjab State Power Corporation Limited for supplying free power to the farm sector.

There is a strong resentment in the industrial sector over the ID fee. “The development is a major setback for the state industry,” said RS Sachdeva, co-chairman, PHD Chambers of Commerce. He said industrialists and other consumers were already paying 13 per cent electricity duty on power tariff. “We had held several meeting with Deputy Chief Minister Sukhbir Badal to seek relief for the industry to make it competitive. But the government has further burdened the industry,” said Sachdeva.

The levy of ID fee on power and Rs 1 per litre cess on diesel and petrol would adversely affect the state’s growth. Punjab already figures among the slowest growing big states in the country and the increase in the fuel price would have a negative effect on its GDP.

Eminent economist Dr SS Johl said it was unfortunate that the government had levied fee on power tariff. Electricity is an essential input required for the state’s development. Likewise, the hike in diesel and petrol prices was an equally retrograde step, he said.

“Moreover, the revenue earned through the ID fee and hike in petrol and diesel prices would most likely be utilised to meet state’s committed expenditure rather than on development projects as the state is already facing a huge fiscal and revenue deficit,” he added.