Power tariff hike a severe blow to MSMEs: KCCI

Power tariff hike a severe blow to MSMEs: KCCI

MSMEs (micro, small and medium enterprises) in Karnataka, who have been affected by Covid-induced lockdown in the State, are in for a yet another shock in the form of an increase in power tariff, according to Isaac Vas, President of Kanara Chamber of Commerce and Industry (KCCI).

The Karnataka Electricity Regulatory Commission (KERC) has approved an average increase in tariff by 30 paise per unit with an average increase of 3.84 per cent. However, the Escoms (electricity supply companies) in the State had sought an average increase of 135 paise per unit accounting for 17.31 per cent for 2021-22.

MSMEs bear the brunt

Vas told BusinessLine that the MSMEs have borne the major brunt of the pandemic and the lockdown.

There is no revenue for many MSMEs due to the continuous lockdown during the first Covid wave and once again, from April 23 till date. However, MSMEs have no other way other than to pay various expenses, including salary, interest on debts, rent, security and other expenses which are fixed in nature. As there is no work for a majority of workers, the purchasing power has also been affected.

Stating that the increase in the electricity tariff is like rubbing salt on the wounds during such difficult times, he said the Government should have been considerate to reduce the tariff during these challenging times.

Also read: Why supporting MSMEs during Covid -19 will help socially backward groups?

As per the regulations, the tariff fixing method may be appropriate during the normal business times. At a time when MSMEs are suffering on many fronts during the pandemic, the increase in power tariff would serve a severe blow to the MSMEs.

Vas urged the Government to suitably modify the electricity tariff regulations during the pandemic time. “As a majority of entities involved in power generation, transmission and distribution are owned by the State Government, we request the Government to consider the plight of the MSMEs and direct the power entity to charge a lower tariff than what is prescribed by the tariff regulations. Such proactive measures are required to sustain the economic activities,” he added.

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