Bengaluru: Resentment is brewing among the industrial and commerce sectors of Karnataka against the KERC‘s recent decision to pass on to consumers the burden of pension and gratuity expenses of energy department employees.
Demanding a rollback of the 36 paise surcharge per unit, entrepreneurs and industrialists, led by Federation of Karnataka Chambers of Commerce and Industries (FKCCI), have knocked on the high court’s doors. “The HC Tuesday ordered notice to the energy department and state govt,” said MG Balakrishna, president of FKCCI.
Micro and small industries are upset over KERC’s decision to decline their request for a separate tariff category for MSME sector. Many industrialists feel the 36 paise hike per unit will translate to about Rs 1 per unit in the bill, including additional charges, leaving a severe impact on industries with an annual burden of Rs 1,200 cr on MSMEs and the manufacturing sector.
Shivakumar R, president, Peenya Industries Association (PIA), pointed out that 6 lakh industries support 1.8-crore population and generate a revenue of Rs 1.3 lakh crore to the govt.
Arif HM, past president of PIA, said small and micro industries are already in the ICU and if the govt forces them to pay for its burden, they may shut shop.
FKCCI sources said there are about 6 lakh MSME units and 2 lakh commercial establishments in Karnataka, and they consume 13,000 MU to 13,500 MU of power, generating a revenue of over Rs 1.30 lakh crore to Escoms. “In fact, MSME and commercial sectors draw 18-20% of total energy generated in Karnataka. The sectors cannot be taken for granted by the govt,” asserted an industrialist from Kamakshipalya and member of FKCCI.
Balakrishna said the surcharge bill may run into several crores of rupees for industries which need power as raw material. He maintained that industries would have been committed to their clients with year-long contracts and considered fluctuating rates of raw materials. “But if the govt begins to thrust unnecessary expenses on industries, it would have a serious impact on the production chain and profitability…,” he added.