Acute Power Shortage Renders 2 Lakh Jobless In AP

Over 6,000 small and medium units, especially in the textiles, steel and ferro alloys sectors, have been forced to down their shutters, resulting in more than 2 lakh people being rendered jobless in the last 18 months due to the ongoing power crisis in the state, said state’s industry and trade body Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci) on Monday. 
    
To add to the woes of industry, power tariffs have doubled in the last three years from Rs 3.50 per unit in 2010 to over Rs 7 per unit in 2013, said Fapcci president Devendra Surana, while addressing the media here on Monday to highlight the power woes of industry. 
    
According to Surana, the high power tariffs coupled with erratic power are slowly but surely choking to death the state’s manufacturing sector, which has degrown by 11.5% in 2012 and currently contributes a meagre 1% of the state’s GDP. He pointed out that the latest Andhra Pradesh Electricity Regulatory Commission (APERC) order has imposed a heavy burden of 25 to 60% power tariff hike on industrial consumers, which industry cannot afford to pay. 
    
Narsing Rao of the Medak Small Scale Industries Association, said that most of the small units located in and around Medak are resorting to distress sales of their units due to tariffs and acute shortage of power. 
    
Federation of Andhra Pradesh Small Industries Association (Fapsia) president J Nageswara Rao said production has drastically come down by 45% and employment by 40% in the small scale sector due to the acute power shortages. “Incentives and subsidies have been pending for the last four years to the tune of Rs 1,200 crore,” he said. 
    

Steel Manufacturers’ Association president Suresh Kumar Singhal said that the steel industry in the state is dying as it is getting only 35% of its total power requirement over the past 18 months. “Power is the main input for the steel industry but not only are we getting only a fraction of our total requirement, its cost too has escalated, pushing up our input costs as power accounts for 30-35% of our total input costs.” 
    
According to Surana, while the total power shortage in the state is about 18%, the industry is being subjected to 50% power cuts for the past 18 months. “The state of industry in AP is becoming worse day-by-day. We are not only being neglected by the government but are being singled out to pay through our nose for the power usage of the agricultural sector in the state,” Surana said. 
    
According to Fapcci, the total cost of supply of subsidised power in AP was Rs 7,552 crore in fiscal 2012-13 and the government bore 73% of the total cost at Rs 5,532 crore, while the rest of the burden has been passed on to the industry as Fuel Surcharge Adjustment (FSA). 
    
In 2013-14, while the total cost of subsidized power has been pegged at Rs 14,866 crore, the government has decided to bear only 40% of it (Rs 5,884 crore), implying that it would be dumped on the industry. “It doesn’t take an intelligent guess to figure out who will bear the rest of the burden,” said Surana, pointing out that this will only worsen the already critical condition of industry in the state. 
    
The government has not only turned a blind eye to the woes of industries in the state but has also failed to keep its earlier promises such as refund of value added tax on diesel and removal of electricity duty on captive generation, said Fapcci secretary general M V Rajeshwara Rao. Another Fapcci official warned that the government will not be able to fulfill its promise of adding 2,200 MW this year and will only be able to add 860 MW, leading to a long-drawn shortage of power in the state.