Even as Maharashtra is all set to dazzle the world with the grand Make in India Week and promote itself as an industry-friendly state, industrialists here have warned that if critical issues of high industrial power tariff and governance are not tackled, Chief Minister Devendra Fadnavis’ pet project Make in Maharashtra would remain a mere slogan.
The State has been facing the problem of high industrial power tariff for past few years. Five neighbouring States offer industrial tariff cheaper by Rs 1.5 to Rs 3.5 per unit than Maharashtra’s base tariff of Rs 8.23 per unit. As a result, there is a churning in certain sectors in the industry at a time when the State is hosting the Make in India Week.
Beginning Saturday, Maharashtra government will go all out to woo investors from 68 countries at the conclave. It will showcase the strengths of Maharashtra and Mumbai at separate seminars. They will elaborately highlight Maharashtra’s inherent strengths as a highly industrialized State and what it offers. The government will aggressively showcase initiatives such as simplified ‘ease of business’ norms, land availability, freshly revised polities for ports, electronics and tourism.
The base tariff for high-tension industrial consumers in Maharashtra stands at Rs 8.23 per unit, but it goes up to Rs 9.10 per unit when the Fuel Adjustment Charge (FAC), a fee imposed on extra expenditure by the power utility on the power purchase, is added. In Karnataka, the tariff for the same set of consumers is Rs 6.80 per unit, Gujarat offers at Rs 6, Madhya Pradesh’s tariff stands at Rs 6.70, Chhattisgarh offers it at Rs 5.50 and Goa at Rs 4.80 per unit. For low-tension industrial consumers, the rate in Maharashtra is Rs 9.31 per unit while it is Rs 5.80 in Gujarat and Rs 5.50 in Chhattisgarh.
High industrial tariff has forced some foundry industries in Jalna district and alloy industries of Vidarbha to expand in BJP-ruled Chhattisgarh. Besides the power tariff, industrialists complain about availability of land in industrial area or MIDC zones. “Land is vacant, but not available as it is already allocated to some industry house, which has not set up a unit over a period of 10 years,” said Ram Bhogle, chairman, Maharashtra Auto Cluster.
He points out that inefficient governance and corruption at the ground level as the third major factor for the industry’s disappointment with Maharashtra. “There is no control over ground staff, and bureaucracy’s behaviour. This has resulted in increasing corruption in the system where every investor has to grease the palms of local mafia. Unless the State acts swiftly, all the talk of ‘ease of business’ will make no sense,” said Mr Bhogle, former president of Maharashtra Chamber of Commerce, Industry and Agriculture.
Industrialist Ashok Pendse, who works as consumer representative on panel of Maharashtra Electricity Regulatory Commission (MERC) pointed out that high industrial power tariff made a huge difference to power-intensive industries such as plastic processing, metal, chemical and ice industry.
“About 30 to 40 per cent of their production cost depends on power tariff. Maharashtra has edge over other states when it comes to work culture, availability of skilled labour, market connectivity, infrastructure network, but high industrial power tariff has become a huge negative factor, which needs urgent redressal,” said Mr Pendse.
Pradeep Bhargava, former chairman, CII Western Region, said apart from power tariff and land issues, Maharashrtra also trails Gujarat, MP, and Rajasthan in labour reforms. “New States such as Telangana and Andhra have rolled out attractive industry packages compared to Maharashtra, which continues to bask in the glory of being No. 1 in the country. Maharashtra offers good concessions to mega projects, but comparatively less attractive subsidies to Small and Medium Enterprises. As a result, even if mega projects come, they are likely to source other allied material from other States,” said Pune-based Mr Bhargava.
(The writer is freelance Journalist)
