This story is from December 11, 2014

Govt extends power subsidy to December

The state government has extended the power tariff subsidy after local industrialists urged chief minister Devendra Fadnavis to save them from a tariff shock.
Govt extends power subsidy to December
Nagpur: The state government has extended the power tariff subsidy after local industrialists urged chief minister Devendra Fadnavis to save them from a tariff shock. The tariff for December will continue to be at October level. MSEDCL will get Rs706 crore as compensation. The state government will pay 606 crore, Mahagenco 50 crore and Mahatransco the remaining 50 crore. All category of consumers will benefit from the subsidy.
A meeting was held between CM Fadnavis, finance minister Sudhir Mungantiwar and energy minister Chandrashekhar Bawankule late on Tuesday night and representatives of local industrial associations. The industrialists told the ministers that if the subsidy was withdrawn then continuous process industries like steel and ferro-alloys will have to pay 1.50 per unit more.
“We told the ministers that the state had the highest tariff in the country and industries were facing difficulty in competing with industries located in other states. Already some steel and ferroalloy industries had shifted to Chhattisgarh where tariff was almost half that of MSEDCL,” RB Goenka of Vidarbha Industries Association (VIA) said.
Finance minister Mungantiwar told TOI that even though the state’s finances were in bad shape the government decided to prevent industries from a tariff shock. “This subsidy is only for December. We will take the decision on subsidy for January on December 12. We have also asked MSEDCL to contribute as the state is not in a position to pay full compensation to the distributor,” he said.
Earlier, the government had decided to withdraw subsidy for all categories except agriculture. Fadnavis had told the media that subsidy could not be given forever. The performance of power companies would have to be improved as a long-term solution. He had also said that in the next tariff petition, the industrial tariff would reduce by one per unit.
Mungantiwar told TOI that MSEDCL’s new tariff would come into effect from February and it was the question of only a month.

The Congress-NCP government had given a subsidy to MSEDCL in February 2014 for one year. It had made a budgetary provision of 9,000 crore for the subsidy. Another 1,500 crore was approved through supplementary grants. The monthly subsidy amount was 706 crore. Out of the 10,500 crore subsidy, 7,543 crore had been spent till November. The government had about 3,000 crore subsidy amount left.
VIA and other industrial associations have thanked Fadnavis and the ministers for extending the subsidy and urged them to give the subsidy in January too.
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