There seems to be no light at the end of the tunnel for the small and medium industry which is going through an unprecedented power crisis.
Decline in the demand from agriculture sector notwithstanding, these MSME units are yet to be given power supply promised to them, which is forcing them to be placed under “incipient sick units” category, a category units that failed to repay their loans for two continuous months.
According to Federation of AP Small Industries Association president A.P.K. Reddy, small and medium units involving an estimated Rs. 57,000 crore investment, financed by 48 major banks are on the verge of being declared non-performing assets.
With peak hour shutdown and weekly power holiday schedules hitting their production capacity, MSMEs are now looking at the Government to bail them out taking the help of the Central Government, if necessary. A group of entrepreneurs in the SME sector have put up stalls at the ongoing Engineering Expo organised for the first time in the State in cooperation with the United Nations Industrial Development Organisation, Federation of Indian Export Organisations and National Small Industries Corporation, supported by the Andhra Bank.
The magnitude of the crisis faced by the industry could be gauged from the fact that power situation coupled with the political uncertainty had figured as a major theme in the panel discussions and experts expressed concern that these issues had landed the State’s industrial development in a soup.
“The issue can be resolved and the State can be put on the growth path if power is made available to industry,” Fapcci president Devendra Surana said adding timely measures could propel the State back to double digit growth.
City-based Gandhar Oil Refinery senior marketing manager Amin Merchant described how his company had shown a downtrend in its results in the last fiscal. “We have lost close to 40 per cent of business because of power shortages. More than the loss in business, penalties we have paid for delay in supply of products is hurting us,” he said.
Another SME, Thread Form Machine Industries representative Sudarshan Chekuri was more vocal in his criticism of the Government’s failure to take corrective measures that could have helped in recovering some of the losses. “Where is the governance? There are of course tall claims on promoting industry and attracting investments, but they are all confined to paper,” he said.
While absence of assured supply is one factor that is hitting the industry, hefty penalties are being imposed on crossing a particular usage limit. He represented the matter to the AP Electricity Regulatory Commission about the regulation and control measures being imposed by the power utilities from time to time. “But to our surprise, we are also getting inflated power bills with penalties on usage of over 60 per cent peak load,” he said.
Mr. Reddy wondered how the Government was inviting new industries when it was unable to solve the problems of the existing units. Paper recycling industry in Rajahmundry, spinning mills in Guntur and foundries and forgings in Ranga Reddy district have all reported significant cut in production as also losses during the last couple of years.
The Government should instead focus on waiving penalties imposed on industry and consider measures to repay huge amounts due to the power utilities.
“The APERC, on its part, should consider an exclusive hearing for the industry representatives henceforth so that their problems can be addressed speedily,” he said.