Steel industries threaten closure if power tariff hike not rolled back

Citing heavy financial strain after hike in power tariff, Himachal Pradesh Steel Industries Association has threatened to close their factories from February 25 if the hike is not rolled back.

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Himachal Pradesh Steel Industries Association has also given a call to abstain from depositing the upcoming electricity tariff amounting to Rs 100 crore if the adverse decision of imposing power hike is not reconsidered.

At present, 28 steel units operate in various industrial clusters across the state. The government had imposed a milk cess of 0.10 paise per unit, an environmental cess ranging from 0.02 to 0.10 paise per unit on industrial consumers and withdrew a Re 1 per unit power tariff subsidy in September 2024, thus burdening the industry.

“Despite repeated requests over the last three months and assurances by the Chief Minister that the hike of Re 1 per unit on the power tariff would be reconsidered, no action has been taken. The industry has instead been levied an additional cess of 20 paise per unit, thus making their operations financially unviable,” points out the association members.

“Power is a crucial component of steel manufacturing, contributing nearly 50 per cent to the total production cost. Even a minor increase in tariff severely impacts the competitiveness. In the last two years, the total power tariff has surged by as much as 46 per cent, making operations unsustainable,” lamented Rajiv Singla, association’s general secretary.

The Himachal Pradesh Steel Industries collectively hold a 300 MW power load. “Given the unbearable cost burden, we have decided to shut down our factories from February 25 and will not deposit the upcoming electricity bill amounting to Rs 100 crore,” informed Singla, who pointed out that this crisis will have severe consequences.

Closure of the steel units will further aggravate the financial crisis of the state as Rs 50 crore would be lost by way of GST revenue per month and it will also deepen the unemployment scenario as over 10,000 workers will lose their jobs.

While strongly opposing the unjustified imposition of cess meant for milk production, which unfairly burdens industries, the association has demanded its roll back while asserting that the industrial consumers cannot be made to pay for government freebies.

“We urge the state government to take immediate corrective measures to roll back the tariff hike and cess before the situation worsens. Otherwise, the steel industry in Himachal Pradesh will be forced to take further drastic steps,” warns the association.