Desperate steel makers of Vidarbha have urged chief minister Devendra Fadnavis to reduce their power tariff as most steel units in the region have closed down due to competition from neighbouring states.
The alarm bells have started ringing for this sector as the state government has withdrawn monthly subsidy of 706 crore, which had kept the tariff low. The subsidy was given till October by Congress-NCP government. The BJP-Sena government withdrew it in November. After requests from industries, it was given only for December. Now, industries are feeling the pinch in January.
Steel manufacturers Shyam Mundhda and OP Mundhra told the media that their tariff was 6.70 per unit when the tariff was subsidized. In January, it has increased to 9.25 per unit.
Rajesh Sarda and Nikhil Bansal said the industrial power tariff in neighbouring states was far lower as compared to Maharashtra. It is 4.20 per unit in Chhattisgarh, Madhya Pradesh 4.70 per unit, Andhra Pradesh 5.50, Telangana 5.50 and Gujarat 5.25. "Even with subsidy, our tariff was the highest, but we were managing somehow. However, now we have no alternative but to shut shop," Bansal said.
Manoj Maheshwari explained that a major cost of production in steel was electricity. "The cost of making steel in Chhattisgarh is 4,200 per metric tonne. If we add freight and central sales tax, it is 5,450 per tonne anywhere in Vidarbha. On the other hand, our cost of production is 9,500 per metric tonne. How can we compete when the cost difference is so huge," he asked.
Source: The Times of India
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