State FM unwilling to spare 500 crore

Nagpur: On one hand, the chief minister Devendra Fadnavis plans to provide cheaper electricity, finance minister Sudhir Mungantiwar is unwilling to spare over 500 crore due to precarious financial condition of the state.The finances will be further strained after seventh pay commission is implemented in 2016. CM Fadnavis may have to go after the second option.
Vijay Kelkar committee has stressed on the need for providing sops to the industries of the two backward regions.Reduction in power tariff will be one such measure. The industries in Vidarbha and Marathwada already have one concession - they are exempted from paying electricity duty.
The committee has also suggested in its report that a cess could be imposed on power consumers of Western Maharashtra and Konkan to fund the subsidy to backward regions. However, the government is unlikely to go in for this option.
Explaining the CSS option, the source said, "At present, CSS is quite high, which discourages industrialists to go for open access - buy power from exchanges or private generators directly. However, if the CSS is reduced to nil most industries will prefer open access. Only the small industries will not able to avail this option."
BJP-Shiv Sena government is trying its best to make the state a manufacturing hub by taking advantage of prime minister Narendra Modi's 'Make in India' initiative. One big reason why companies are reluctant to set up unit in state are extremely high power tariffs. In fact quite a few companies have relocated to or expanded in other states on account of cheaper power there. The government wants new industries to set shop in Vidarbha and Marathwada and sops are important for that.