Jaipur: Jolted by the state government’s budget announcement to hike electricity duty by 150% on captive power, representatives from energy-intensive sectors like cement, textile, mining, and fertiliser are desperately knocking the doors of various government departments, including the Chief Minister’s Office to get a relief from the punitive proposal. 

If not rolled back, the duty hike from 40 paise per unit to Rs 1, probably the highest in the country, would not only strain them with an annual additional burden of Rs 500 crore but put the operational competitiveness of many companies at serious disadvantage, said the industry. 

A delegation of Rajasthan Textile Mills Association (RTMA) on Monday met principal secretary to chief minister Kuldeep Ranka and urged him to take up the rollback request at the appropriate level. The cement industry is trying to meet all the relevant authorities, while big companies making the rounds of various departments individually. 

“The textile units had expected relief from high level of tariffs. Instead, the government has announced to increase the duty. In fact, states like Maharashtra, Gujarat, Telangana, and Andhra Pradesh are giving Rs 2 tariff subsidy to textile industry. The costly power will raise financial burden on the mills and we will be uncompetitive both in the domestic and international market,” said Ashok Kumar Jain, secretary of RTMA. 

Electricity duty on captive power remained exempted since 2006. But in 2015, the then BJP government had imposed Rs 40 paise per unit. With the additional duty, the cumulatively duty outgo will surge to Rs 800 crore, as per the estimates of the industry. 

Atul Sharma, head of FICCI-Rajasthan, said the plants in Rajasthan in any case face several other locational disadvantages both for sourcing raw materials and marketing finished products. “The distance on both counts adds to the cost. Unless there is some relief, margins will get eroded and there will be less incentive for new industries to look at Rajasthan as an investment destination,” added Sharma. 

Published On : 16-07-2019

Source : Times of India

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