KCCI opposes MESCOM's proposal for power tariff hike

‘If hike was allowed, it amounts to rewarding inefficiency’

The Kanara Chamber of Commerce and Industry (KCCI) has opposed Mangalore Electricity Supply Company’s (MESCOM) proposal to increase power tariff by ₹1 at a time, when BESCOM did not propose any increase and also proposed reduction in tariff for high-tension industrial consumers.

In a memorandum to Chief Minister B.S. Yediyurappa, who holds the Energy portfolio, chamber president Isaac Vas said MESCOM’s proposal for tariff hike would severely affect power consumers in Dakshina Kannada, Udupi, Shivamogga, and Chikkamagaluru.

At a time when micro, medium and small enterprises (MSMEs) were contributing to over 29% of GDP across the country and employing crores of people, power tariff hike would affect their very existence. In Dakshina Kannada alone, over 1 lakh people were employed in MSME as against a mere 10,000 by mega industries, he pointed out.

With COVID-19 pandemic and the lockdown impacting their cash cycles, MSMEs that were the backbone of India’s inclusive growth story have received a severe jolt and faced multiple bottlenecks and retardation. The country-wide lockdown dragged MSME owners, employees and external stakeholders to unexpected repulsions. Extended lockdown hurt the supply of finished goods, procurement of raw material, and employees’ availability to work in production and supply processes. Post lockdown, MSMEs face challenges related to debt repayments, wages/salaries, statutory dues, etc.

Mr. Vas said the Karnataka Electricity Regulatory Commission that approves tariff hikes comprises mainly retired government servants and ESCOM executives. Thus, there was always ‘conflict of interest’ while considering power tariff hike. Industry and professional bodies should have adequate representation in KERC so that the commission could advise ESCOMs to follow the best practices in distribution and efficiency in power management.

It is not just MSMEs that get affected if tariff was hiked, but the common man would also considerably be affected. With many losing their jobs or getting salary cuts, people would find it difficult to bear the increased bill.

If hike was allowed, it would be nothing but rewarding the inefficiency of ESCOMs in reducing their overheads and distribution losses, Mr. Vas said, adding MSMEs would collapse if hike was allowed.