KCCI urges Karnataka CM not to hike power tariff for MSME sector

The Kanara Chamber of Commerce and Industry (KCCI) has urged Chief Minister Basavaraj Bommai not to hike power tariff in the State for the micro, small and medium enterprises (MSME) sector.

In a letter to Mr. Bommai on Saturday, a copy of which released to the media, president of KCCI Shashidar Pai Maroor said that Escoms are proposing to increase the tariff by ₹2 per unit.He said that the MSME sector in the country is the second largest employment generator after agriculture, and acts as a breeding ground for entrepreneurs and innovators with considerable support in strengthening the business ecosystem.

The sector contributed 29 % to overall GDP. With the pandemic and lockdowns impacting their cash cycles, the MSMEs, which are the backbone of the country’s inclusive growth story, have felt a significant impact and faced severe disruptions. As an important part of the domestic and global value chains, the plight of MSMEs is of deep concern.

The announcement of a countrywide lockdown dragged MSME owners, employers, and external stakeholders in unexpected times, where no one had an experience to handle this kind of situation. Extended lockdown had a negative impact on supply of finished goods, procurement of raw material and availability of employees to work in production and supply processes.

Post lockdown period, the MSME sector is facing challenges related to debt repayments, wages/salaries, statutory dues, etc., he said.

The KCCI said that it is not only the MSME units which faced challenges; even consumers are left with lower disposable income. Many enterprises laid off their workers because of inability to pay salaries, vacated their offices due to incurring expenses, and halted their production due to no demand.

The MSME sector will completely collapse if the power tariff is hiked. “We request that Escoms should reduce their distribution losses and overheads instead of putting additional burden on the consumers,” he said.

The impact of the hike will be particularly disastrous for the MSMEs as they struggle to revive operations from the pandemic and severe slowdown in the economy, the KCCI said.

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Printable version | May 20, 2022 2:49:54 pm |