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Unscheduled power cuts hampering state’s growth: FAPCCI

Posted by on July 13, 2011 0 Comment

Hyderabad: The Federation of Andhra Pradesh Chambers of Commerce and Industries on Wednesday said that the frequent and unannounced power cuts were leading to an adverse impact on economic growth of the state and called for immediate solution to the problem.

Speaking to the media at FAPCCI House, Red Hills, FAPCCI president VS Raju said that the industry has been suffering from power cuts for the last 10 days or more.

“This is not the first time power cuts are imposed on industry without intimation. Such arbitrary power cuts affect the working of the industry entailing in the loss of production, supply chain, loss of confidence of customers, besides damage of equipment and materials-in-process,” Mr Raju said.

He added that due to loss of production and sales, the industrial units will not be able to honour the commitments to their bankers in terms of repaying the loans taken by them and their accounts would become non-performing assets. All this means great economic loss and setback to the State and the country,” the FAPCCI chief said.

FAPCCI vice president Devendra Suvarna said that “to tide over the situation arising out of power shortage in the last summer, the Government made arrangements to buy power to the extent of 800 to 1000 MW.”

He continued, “this purchase reduced the adverse impact on the industry, trade, commerce and the overall economy of the state. But even then the purchase of power then did not obviate the difficulties of the industry.”

Mr Suvarna added that the industry suffered losses last year and last summer as the declared power cut was for two days in week and 4 hours in the remaining days. “This alone constitutes a loss of 30 per cent of industrial and trading activity, which has affected gravely the economic growth and health of the State as the State would suffer equally in receiving its tax revenues.”

“Having already incurred such a damaging impact in the last summer and the year, the industry and for that matter the entire State economy is no longer in a position to suffer further losses. Their capacity to absorb adverse impact is getting weakened year after on account of power cuts taking place every year for one reason or the other. The continuous power shortage brings down the economic growth of the State.”

The FAPCCI said that from the reports published by various agencies including RBI, it is seen that the industrial growth has slumped to a nine month low at 5.6 per cent in May as compared to 8.5 per cent expansion posted a year ago.

The industrial growth in the State was much more affected than what was affected in the country. When the industry is already slowing down, the power cuts further aggravate the rate of growth of the industry as well as the economic growth of the State. Theo slowing down would also put the finances of the State in much greater strain.

“Therefore, in the larger interest of the economic growth as well as industrial growth it is a very essential that power situation has to be improved immediately, if necessary, by buying power,” Mr Suvarna said.

He pointed out that the power situation today in the State is that there is no production from hydel sources and some of the thermal power stations are not producing the po0wer. The agricultural loads have increased due to inadequate rainfall. Even the domestic and commercial demand has increased for the sale reason.

At this stage, it is pertinent to draw your attention to the news item published in Economic Times on Saturday, 9th July, 2011. The following is the extract of the news item.

“Power Exchanges are flush with electricity, which is available cheap – as low as Rs. 1.50 per unit at night, and industrialists are lapping it up to restart sick units, introduce night shifts and retire diesel-fired-back up units.”

“Several, Steel, Textile and Cement Mills are buying power from power exchanges particularly in Punjab and Tamil Nadu, where State Government have adopted favourable policies of “open access.”

“Customers are queuing up in industrialized States like Gujarat, where they are awaiting regulatory approvals to start buying power from exchanges. Many other States are facilitating such deals.”

From the above news report it is clear that many States are taking advantage of availability of power with power exchanges and the States enabling the industrialists to buy power through exchanges and the Open Access conditions are quite favorable for such purchases.

Whereas our State has so far not taken such a favourable policy decision except that it announced “open access” policy, which is not conducive for MSMEs to buy power from exchanges as certain conditions do not enable an industrialist to access power though open access from power exchanges.

Tamil Nadu has been suffering power shortages far higher than Andhra Pradesh. But, it has taken pro-active favourable open access policy to help the industry grow whereas the Andhra Pradesh authorities have not taken such favourable policies.

It is time that the Government and Electricity authorities come out of the old-guard policies and be pro-active to the changing conditions which are highly dynamic; only then the State can march forward in the industrial and economic growth and fulfil the aspirations of the people of the State.(INN)

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