Power tariff hike sends shock waves among MSME sector

COIMBATORE: For the MSME sector, already reeling under the impact of the property tax hike, economic downturn and rise in raw material prices, the proposed increase in power tariff has come as a rude shock.

Most of the small-scale industries involved in the manufacture of grinders, pumps and motors in Coimbatore fear that they may be forced to either shun production or lose out competency in the global market due to upward revision in power tariffs.

“Coimbatore, a traditional hub for pumps, is now unable to compete with emerging competitors like Gujarat due to the cost factor. Pricing of pumps manufactured in Gujarat is already 20 per cent lesser than ours. With this, the power tariff hike may further worsen our competitiveness in the global market,” said J James, president of Tamil Nadu Association of Cottage and Micro Industries (TACT). Already a majority of over 25,000 job working units functioning in rented buildings were forced to pay a higher rent by owners following a hike in property tax by 150 per cent. “If this power tariff hike comes into effect, it may result in an increase by over Rs two per unit for low tension consumers. Our survival is now at stake,” he added.

Echoing a similar view, S Surulivel, vice president of Tamil Nadu Small and Tiny Industries Association (TNSTIA) said their industries may land in deep financial distress due to a steep increase in power charges. “Industries executing government projects have to absorb the additional cost spent on power tariff hike. With many small and tiny industries dependent on electricity, the power tariff hike will push up overall production cost,” he said.

On behalf of TNSTIA, the members have decided to raise their objection against the power tariff rise to the electricity department during the grievance meetings to be convened in every district.

Industrialists recollected how long hours of power outages in 2008 resulted in several industrial units shutting operations across Coimbatore and in the western region. They sought the government to roll back the power tariff hike to prevent the existing situation from going bad to worse as more than 5 lakh labourers are dependent on over 40,000 micro, small and medium enterprises in Coimbatore and Tirupur districts for their livelihood.